Ripple, known for its regular monthly release of 1 billion XRP through an escrow system, is set to unlock three tranches totaling $620 million worth of XRP on January 1, 2024. This will consist of 100 million, 400 million, and 500 million XRP in separate transactions. This release represents 1.84% of the current circulating supply and 2.17% of the remaining XRP under Ripple’s control, with the process continuing until May 2027.
Interestingly, on the eve of the New Year, three unlock transactions held in two closely monitored wallet addresses labeled ‘Ripple (22)’ and ‘Ripple (23)’ will be completed, releasing XRP locked in November and December 2019. These two wallets currently hold a total of 2 billion XRP set to be released over the next two months until March 1, 2024.
Looking at Ripple’s actions earlier this month, it’s evident that the expected 1 billion XRP was unlocked in December. Ripple re-locked 800 million XRP (80% of the total unlocked) into the escrow system, which will be fully released by April and May 2027.
Significantly, despite holding only 200 million XRP, Ripple unlocked 310 million XRP worth $192 million from its main wallet address ‘Ripple 1’ in December. The sales were executed in four weekly transactions, and all remaining XRP were returned to the same wallet address. Additionally, Ripple conducted two transactions of 60 million XRP each on December 6 and 12, and another transaction of 120 million XRP on December 20, followed by a final transaction of 70 million XRP on December 27.
Ripple’s escrow system was designed following the creation of XRP in 2012 with a total supply of 100 billion. The company distributed 20 billion to the coin’s creators and core team, controlling the remaining 80 billion. In 2017, Ripple implemented a new system to release XRP to the market in a more predictable and controlled manner, using escrow wallets and smart contracts that prevent the use of XRP until certain conditions are met. Despite releasing 1 billion XRP each month, Ripple only spends or sells a portion, with the rest being re-locked for future releases.
However, these sales create a significant supply inflation for XRP, as the unlocked coins regularly enter circulation at the beginning of each month. Ripple thus has direct influence over the economic dynamics, future price, and value of its own cryptocurrency.