With Ripple’s XRP Escrow, Ripple’s next billion dollar transaction.
Just in time for the end of the year, Ripple is causing a stir again. The reason: XRP transactions are worth almost a billion US dollars.
Ripple Receives One Billion XRP
While people enjoyed the last few minutes of the old year to the full, two large XRP transactions are causing a big stir. A total of one billion XRPs have been sent.
In particular, during the second transaction, puzzled comments from users gathered on Twitter. XRP is currently trading at $ 0.84. At the postponement, their total value was slightly lower than $ 835 million.
Experienced users were not amazed by this event. You already know it too well from the past. Such a shift takes place at the end of each month.
Ripple’s XRP Escrow
Ripple is a comparatively centralized cryptocurrency. The company of the same name decided in 2017 to set up an escrow (trust account). Ripple’s developers originally added 55 billion XRP to this account.
This corresponds to 55 percent of the maximum circulating supply. Ripple itself has a very large proportion of the coins. The monthly payout is used to cover the company’s expenses.
800 to 900 million of the one billion XRP are then sent back to the escrow account. The 2017 plan says that a total of 55 billion XRP should gradually be brought into circulation.
Understandably, this mass of coins should not suddenly flood the market, which would have led to an extreme drop in the price.
So far, there are 47.5 billion XRP in circulation. Ripple’s technical director David Schwartz announced in 2017 that the XRP in the escrow account would be distributed within the next 55 months.
Fifty-five months is roughly four and a half years. Accordingly, this goal would have to be completed in 2022. At the moment, there is still a good 46 billion XRP in the lock. So over the past four years, only nine billion more XRPs came into the market from the escrow account.
Criticism of the XRP Escrow
The supporters of Ripple’s plans saw the automated escrow system as a problem early and expressed harsh criticism. Even a petition should prevent this from happening. Investors saw their investment in jeopardy.
Too large a supply would have driven the price down. Over time, the view of many users relaxed. According to their experience, no corresponding price loss could be seen in practice.