Ripple recently unlocked 1 billion XRP tokens from its escrow accounts, worth approximately $3.10 billion at current prices. This release, following the company’s monthly policy, has stirred market concerns. The tokens were released from two accounts: ‘Ripple (26)’ and ‘Ripple (27)’, with 500 million XRP coming from each. Notably, these tokens had never been unlocked from these specific accounts before, adding further intrigue.
As part of its process, Ripple doesn’t flood the market with all of the unlocked XRP at once. Instead, it allocates only 20-25% for immediate use—mainly for market sales, strategic partnerships, and transactions with institutional buyers. The remainder is re-locked in escrow for future distribution. Despite this controlled release, XRP’s price has dropped more than 24.6% in the past 24 hours, reflecting concerns over the influx of tokens into circulation.
Ripple has implemented an XRP supply control mechanism since 2017. Every month, on the first day, 1 billion XRP tokens are unlocked from the vault, but only a fraction is sold directly to fund operations. In January, for example, Ripple set aside 300 million XRP for future use. This gradual release helps the company manage market volatility and prevent sudden surges in supply that could destabilize prices.
When XRP was launched in 2012, Ripple held onto 80 billion tokens with a plan to release them gradually. The monthly unlocking policy was established to manage liquidity, providing a balance between market demand and the availability of tokens. February’s large release highlights Ripple’s ongoing effort to maintain a stable market and avoid overwhelming the ecosystem.
Also Read: Ripple Labs: From OpenCoin to XRP’s Legal Battle – Can Regulatory Clarity Save Ripple’s Future?
Despite the recent price drop, Ripple’s controlled token release system continues to play a crucial role in shaping XRP’s market dynamics, ensuring a steady flow of tokens while preserving stability.
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