As we approach January 1, 2024, Ripple is set to unlock another 1 billion XRP tokens from its escrow system. This monthly occurrence is part of Ripple's strategy, where they release one billion XRP on the first day of each month.
On the upcoming January 1, Ripple will unlock a total of $620 million worth of tokens in three transactions: 100 million, 400 million, and 500 million XRP. Interestingly, this represents 1.84% of the current circulating supply of 53.56 billion XRP and 2.17% of the remaining 45.87 billion XRP tokens under Ripple's control.
Of note, the last escrows of 2023, held by two known crypto wallet addresses owned by Ripple ('Ripple (22)' and 'Ripple (23)'), will finalize, unlocking 500 million, 100 million, and 400 million XRP, respectively. These addresses still hold 2 billion XRP tokens for monthly escrows, which will continue until March 1, 2024.
Ripples XRP
Looking back, on December 1, 1 billion XRP tokens were unlocked, and Ripple promptly relocked 80% of them to escrows set to finalize by April and May 2027. Despite retaining only 200 million XRP, the company engaged in sell-offs, totaling 310 million tokens ($192 million) in December, with transactions occurring weekly.
Understanding the mechanics behind Ripple's escrow system is key. Created in 2012 with a capped total supply of 100 billion XRP, Ripple distributed 20 billion to creators and the core team. The remaining 80 billion were put under Ripple's treasury control, with a commitment to a gradual release. In 2017, Ripple introduced an escrow system, releasing one billion XRP on the first day of each month for 55 months.
However, Ripple doesn't necessarily spend or sell all the released XRP; instead, it often relocks them in new escrows for future releases. This strategy extends the circulation deadline for all XRP. These monthly releases contribute to XRP's supply inflation, impacting its economic dynamics, price, and value.
Keep an eye on how Ripple manages its token dynamics in the coming months. If you have any specific angles you'd like to explore further, feel free to let me know.
