Five Ways To Earn Passive Income With XRP In 2025

XRP continues to be a popular altcoin for investors looking to earn passive income in 2025. While XRP itself cannot be directly ‘staked’ like some other cryptocurrencies, there are several methods available to generate passive returns.

This guide outlines five easy ways to earn passive income with XRP, covering both centralized finance (CeFi) and decentralized finance (DeFi) options.

Why choose passive income strategies for XRP?

Passive income allows XRP holders to earn returns without actively trading or speculating. It provides a steady revenue stream, especially useful during volatile market conditions. However, understanding the risks, returns, and security considerations is essential for making informed choices.

1. Exchange-based earning (CeFi)

Many popular cryptocurrency exchanges offer straightforward savings and earning products for XRP.

How it works:

Platforms like Kraken, Binance, and Bitrue allow users to deposit XRP to earn annual interest. This process involves the exchange lending out your XRP to institutional borrowers or traders.

• Kraken: Earn around 1% APY with minimal risk.
• Binance: Offers about 0.7% APY with flexible withdrawal options. Also provides a ‘Dual Investment’ option, which can yield higher returns (up to double-digit APYs), but with higher price volatility risks.
• Bitrue: Provides around 1.5% APY on XRP deposits with daily payouts.

Security and risk: Funds are custodial, meaning the exchange holds your assets. Risks include platform solvency and potential regulatory challenges.

2. Crypto lending platforms (CeFi)

Dedicated crypto lending services offer potentially higher interest rates compared to exchange-based earnings.

How it works:

Platforms like Nexo, Crypto.com, and YouHodler accept XRP deposits, lending them out to vetted borrowers and traders to generate yield.

• Nexo: Depending on loyalty tiers and lock-in periods, you can earn between 5% to 10% APY, with promotional periods occasionally offering higher returns.
• Crypto.com: Flexible rates are very low (~0.08%), but locking in XRP for three to six months can increase yields significantly (up to ~29% APY), though often requiring holding large amounts of their native token CRO.
• YouHodler: Typically offers around 8% APY, suitable for medium-risk tolerance investors.

Security and risk: While these platforms claim strong security measures and regulatory compliance, risks involve platform bankruptcy, changes in interest rates, and custodial risks.

3. Automated market maker (AMM) liquidity pools (DeFi)

XRP holders can also participate in decentralized exchanges (DEXs) by providing liquidity through AMM pools on the XRP Ledger (XRPL).

How it works:

AMM pools enable users to deposit XRP paired with another cryptocurrency, earning a share of transaction fees generated from trading activities.

• XRPL AMM pools: Fees-based APRs range from low single-digit percentages to around 10% depending on pool activity.

Security and risk: High security due to XRPL’s infrastructure, but exposure to impermanent loss if XRP’s value fluctuates significantly against paired tokens. Additionally, these protocols involve smart-contract risks, though minimal due to XRPL’s native integration.

4. Yield farming via Flare network (DeFi)

The Flare network provides a bridge to decentralized finance for XRP through FXRP, a wrapped version of XRP compatible with Ethereum-based DeFi.

How it works:

Users convert XRP to FXRP, allowing participation in liquidity pools, lending markets, or yield farming protocols like FlareX.

• FlareX pools: Typically offer higher yields, often in double-digit APYs, thanks to additional rewards through governance tokens like YFLR or YFIN.

Security and risk: Smart contract risks and potential impermanent loss due to volatility. The Flare network, although audited, is relatively new, and bridging XRP to FXRP introduces additional layers of risk.

5. Decentralized lending protocols (DeFi)

XRP can also be used in decentralized lending platforms by first converting it to compatible tokens on various chains.

How it works:

Platforms like Venus on Binance Smart Chain (BSC) allow users to supply tokenized XRP as collateral to earn interest.

• Venus Protocol: Generally low yields around 0.7% APY but offer decentralized custody of assets.

Security and risk: Reduced risk of centralized platform failure, but smart-contract risks remain. Returns are typically low due to high liquidity and low borrowing demand for XRP.

Comparison table of passive income strategies

How to choose the best method for earning passive XRP income

Selecting the right passive income strategy depends on your risk tolerance, desired returns, and comfort with either custodial or non-custodial platforms. If you’re risk-averse and prefer simplicity, exchange-based or lending platforms may be suitable.

For potentially higher returns with more exposure to volatility and smart-contract risk, exploring DeFi platforms like Flare or XRPL liquidity pools could be more appealing.

Always perform due diligence, diversify your holdings, and consider spreading your XRP across multiple platforms to balance risk and reward effectively.

1. 01.

   What is the best way to stake XRP?

   

   Native staking is not available. Instead, you can participate in earning programs on CeFi platforms or convert XRP to FXRP on Flare and stake or farm it in DeFi protocols to earn yields.

2. 02.

   Is it possible to earn passive income while holding XRP?

   

   Yes. You can earn passive returns by depositing XRP in centralized platforms (exchanges or lending services) or by supplying XRP to decentralized protocols such as AMM pools on XRPL or DeFi networks via FXRP.

3. 03.

   Is XRP a good investment for 2025?

   

   XRP has seen several positive developments in 2025, such as the SEC dropping its infamous lawsuit against Ripple and several XRP ETFs awaiting approval. So, XRP’s suitability depends on your risk tolerance and market outlook. It offers liquidity and established use cases, but its price is subject to regulatory and market fluctuations. Always research and consider diversifying your portfolio.