This is what happens when Ripple unlocks 1 billion XRP tokens in November
Every month, Ripple unlocks 1 billion XRP tokens from an escrow system programmed within the XRP Ledger. In November, this token unlock will happen in three transactions: 100 million, 400 million, and 500 million XRP.
In November 2023, this unlock represents 1.86% of the current circulating supply of XRP. The remaining XRP tokens owned by Ripple are still locked in escrows and will be released monthly until April 2027.
There are three escrows that will reach finality on October 31, held by two known crypto wallet addresses under Ripple’s control:
- Address “Ripple (22)” – unlocked 100 million XRP
- Address “Ripple (22)” – unlocked 400 million XRP
- Address “Ripple (23)” – unlocked 500 million XRP
These addresses still hold 4 billion XRP tokens for monthly escrows that will be unlocked within the next four months.
This is what Ripple did with the 1 billion XRP released in October
In October, 1 billion XRP tokens worth $550 million were unlocked. However, Ripple immediately relocked 800 million of these tokens to escrows set to finalize by March and April 2027.
Ripple kept 200 million XRP for itself but spent 205 million tokens ($112.75 million) from its main address, “Ripple 1.” This amount was sourced from its balance from previous months.
The sell-offs occurred weekly in three transactions, all sent to the same address, “rJqiM…La8nE.”
- On October 9, 60 million XRP was sold
- On October 16, 75 million XRP was sold
- On October 24, 70 million XRP was sold
How does the escrow system work for Ripple unlocks?
Ripple created XRP with a capped total supply of 100 billion. The company distributed 20 billion to the creators and core team, while the remaining 80 billion was controlled by Ripple’s treasury.
To release these coins gradually, Ripple implemented an escrow system in 2017. This system uses smart contracts to lock up XRP until certain conditions are met. One billion XRP is released on the first day of each month for a total of 55 months.
Ripple has been relocking the remaining tokens each month in new escrows instead of spending or selling them. This has extended the deadline for all XRP to start circulating.
Hot Take: Ripple’s Controlled Release Strategy
Ripple’s controlled release strategy for its XRP tokens through an escrow system showcases its commitment to managing the supply and market impact of the cryptocurrency. By unlocking a portion of tokens each month, Ripple ensures a predictable and controlled distribution.
This approach helps prevent sudden market fluctuations that can negatively impact the value of XRP. It also allows Ripple to strategically allocate funds for development, partnerships, and other initiatives while maintaining stability in the market.
Overall, Ripple’s escrow system provides transparency and confidence to investors and users alike, showcasing the company’s long-term vision for XRP’s success.
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