Ripple finds possible end date for XRP unlocks, but has a drawback
Ripple has revealed some insight into the potential completion date for XRP escrow releases. This announcement sets the time frame to end the XRP unlocks around 2027 and reflects Ripple’s careful approach to driving the supply and distribution of the cryptocurrency. However, Ripple recent activities may suggest an extended deadline for the XRP unlocks beyond the projected 2027 schedule.
Ripple introduced XRP to the cryptocurrency market in 2012, setting a capped total supply of 100 billion XRP. Out of this, 20 billion XRP were distributed to the creators and the core team. The remaining 80 billion XRP were held in Ripple’s treasury, and the company committed to releasing them gradually rather than all at once.
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To ensure a more controlled and predictable release of XRP, Ripple implemented a new system in 2017. This system utilized smart contracts that lock up XRP, making them inaccessible unless certain conditions are met. Ripple’s condition was to release one billion XRP on the first day of each month for 55 months, totaling 55 billion XRP.
In the third quarter of the 2023 XRP market report, Ripple disclosed details about its XRP holdings, dividing them into two categories. The first category includes XRP in corporate accounts, which are available for operational needs. The second category involves XRP in escrow wallets, which remains inaccessible to the company. As of September’s end, Ripple had 5.25 billion XRP in spendable balance and 41 billion XRP in the inaccessible wallet.
The escrow releases one billion XRP monthly, with Ripple selling a portion. For July, August and September, Ripple reportedly sold 892 million XRP. Despite plans to release around 40 billion escrowed XRP over 42 months, Ripple has been relocking a significant portion monthly since August. This practice could extend the timeline beyond the projected 42 months.
Concerns arise among the crypto community about Ripple’s delayed pattern in XRP unlocking, with some interpreting it as an extended request for funding from XRP holders.
Debates on Ripple’s burning strategy
Ripple also stirred discussions when director Matt Hamilton hinted at the potential of burning all XRP tokens in its escrow wallets. This development added complexity to Ripple’s legal battle with the U.S. Securities and Exchange Commission (SEC). The rumor of this burning strategy started circulating on the X platform within the XRP community.
Famous crypto enthusiast and U.S.-based real estate broker Kristin Dack raised concerns on X about the impact of burning escrowed XRP on investors’ wealth, cautioning against actions that could lead to financial losses for XRP holders.
Rumors that #Ripple may burn billions of its own #XRP .
The possibility of burning a significant portion of your escrow XRP is generating debate in the #XRPLCommunity , such a move could trigger a price increase, enriching current XRP holders. https://t.co/LP28KKosoZ pic.twitter.com/7MYS1X3C5F— 山丨ㄥㄥ Trader_Kamikaze 🇧🇷 🤘 (@trader_kamikaze) December 25, 2023
She also highlighted the wider risks associated with enabling a code that could lead to the seizure and burning of XRP, potentially leaving all holders vulnerable to decisions impacting their holdings.
Another crypto enthusiast responded to Dack on X, suggesting that those supporting the idea of burning billions of XRP may be driven by speculation regarding an increase in the XRP price. However, the comparison was made to XLM, which had previously undertaken a similar action, but its price remained unaffected. Ripple’s escrowed XRP balance exceeds 39 billion tokens, suggesting the potential elimination of over $23 billion worth of XRP.
The People talk about this they hope they Will do this beceause they think and hope the price Will go up but xlm did the same thing and it doesn’t change anything with the price
— monster_energy (@monster_gamin) December 24, 2023
Some argue for the importance of the escrow mechanism in ensuring Ripple’s commitment to driving XRP adoption. In contrast, others criticize Ripple’s approach amid challenges to sustain value compared to competitors like Solana.
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Wajeeh Khan
Wajeeh Khan is a financial researcher and writer with 7 years of experience. He has immense exposure to a range of financial assets, including stock, cryptocurrencies and forex - and is particularly well-versed in asset valuation, analysis, and portfolio management. Since 2016, Khan has worked with notable online platforms within financial journalism, including Invezz, Trading-Education, Dog of Wall Street, and News Break. All in all, he has written, editted, and published over 7,000 articles, guides, and market insight. Online casinos started as a hobby for Khan in 2018. But in only two years, it had already become another niche that he started actively researching. Over the past three years, he has written a diversified set of content around gambling for clients from all over the world. Academically, Khan has a Bachelor's in Economics and a Master's degree in Finance. He's also completed a bunch of courses on digital journalism and financial markets at large.
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