Following its monthly routine, Ripple has transferred nearly $1.5 billion of XRP in two significant escrow transactions, locking a total of 680 million XRP on 1st June. While most of the investors are unaware of the company’s such move, these moves have sparked discussions within the community.
As noted by Whale Alert, the first transaction involved 470 million XRP (worth approximately $1.03 billion); while the second secured 200 million XRP (valued nearly $437 million). Both these transactions are a part of Ripple’s long-standing supply management strategy, unveiled in 2017.
Given that XRP has gained heightened attention in the past few months, such transfers are quickly noted by investors. These transactions—especially if it amounts to billions—also significantly impact the XRP price, often tends to increase selling pressure in the market.
As per CoinMarketCap data, XRP has a total supply of 99.98 billion, out of which, 58.57 billion XRP are in circulation. Market data shows that XRP is currently trading near $2.16—down 7.6% in the past 7 days, coinciding with the downtrend in Bitcoin price and the overall bearish sentiment in the crypto markets.
Why Ripple locks XRP in escrow?
Since the first escrow locking of the 55 billion XRP—55% of the total supply—in 2017, Ripple has continually kept locking nealy $1 billion in XRP onto the XRP Ledger. The goal behind the escrow locking XRP was to enhance predictability and transparency in its circulating supply, with it also addressing concerns that Ripple might flood the market with its substantial holdings.
Following this schedule, Ripple regularly releases 1 billion XRP from escrow each month, using a portion for operational needs like funding partnerships or institutional sales, and re-escrows the remainder. The XRP Ledger’s mechanics ensure these tokens remain inaccessible until their designated release, a process praised for reducing market volatility.
The additional transaction of 200 million XRP on June 1 likely represent re-escrowing, with the funds being set aside for the release, as unused tokens are scheduled for the first available month with no prior escrow release.
Also read: Ripple CEO Disses Bitcoin, Declares XRP is 1000x Faster
