This is what Ripple is doing with the 1 billion XRP released in February
Every month, Ripple unlocks 1 billion XRP tokens from an escrow system. On February 1, the company will unlock $500 million worth of tokens in three transactions. This accounts for 1.84% of the current circulating supply and 2.19% of the remaining tokens under Ripple’s control.
In January, 1 billion XRP tokens were unlocked and Ripple immediately relocked 800 million of them to escrows that will finalize by June 2027. The company spent 226.34 million tokens from its main address in January, but still holds 200 million XRP.
This is how the escrow system works for Ripple unlocks
Ripple minted 100 billion XRP in 2012, with 20 billion allocated to its founders and team. The company adopted an escrow system in 2017 to regulate XRP’s release, committing to unlock one billion XRP monthly over 55 months. However, they often re-escrow unused XRP, extending the distribution timeline.
As XRP is released each month, it contributes to the token’s inflation and Ripple has a significant influence on its market dynamics and value.
Hot Take: Ripple’s Controlled Release Strategy
Ripple’s controlled release strategy for XRP ensures a gradual distribution of tokens while maintaining some level of control over their supply. By unlocking a portion of the tokens each month, Ripple can manage market dynamics and prevent sudden surges or drops in value.
This approach allows them to balance their need for liquidity with their long-term plans for XRP adoption and growth. While some may argue that this strategy gives Ripple too much control over the token’s value, others see it as a responsible approach that promotes stability and sustainability in the XRP ecosystem.
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