The rise of defi made it clear, almost all participants of the crypto industry will try to jump onto the wagon, with tokenization. This is exactly what XMR did, like the wrapped BTC, there is now the wrapped XMR, an ERC20 token, that usable on the whole Ethereum network. The XMR owners don’t need to sell their coins when they want to purchase some ETH-based tokens. Just have to tokenize the Monero, and using it as collateral, borrow money for purchasing.
This feature opens many new use-cases for XMR, but of course, the privacy level will decrease dramatically. There will be no more encryption than on the Ethereum itself. But XMR has been delisted from many centralized exchanges, this can’t happen with a tokenized variant on a dex.