Ripple has once again caught the attention of the crypto community as leading on-chain crypto tracker Whale Alert announced that Ripple has released a whopping 1 billion tokens from its escrow account.
While the measure is aimed at improving predictability and transparency in the market through a long-term plan for managing the token supply, investors were wary due to the market’s rapid reaction.
1 Billion Tokens Released in Phases
With its well-coordinated escrow mechanism, Ripple released one billion XRP tokens on September 1. The transaction, executed in three phases within minutes, released 500 million, 200 million, and 300 million XRP tokens respectively.
The first transaction released half a billion tokens, worth approximately $280 million. The second and third payouts quickly followed, injecting a substantial amount of XRP into the market. These tokens, worth over $560 million, were distributed from the “Ripple 24” wallet, which has been active for over seven years.
XRP drops 3%
In response to this pivotal development, XRP’s price temporarily dropped, with the token dropping 3% on the same day. Notably, XRP had a strong day leading up to the unlock, with its price rising 10.5% at one point and closing the day with a 3.74% price increase.
The company has yet to reveal its plan for the recently released 1 billion XRP. In last month’s 1 billion XRP release, Ripple had immediately removed 800 million (80%) of the total number of unlocked XRP tokens.
The crypto company has held 55 billion XRP tokens in escrow since 2017 to regulate the supply of the cryptocurrency. Ripple issues 1 billion XRP tokens each month to provide more predictability in the market. However, the actual number of tokens released into circulation is often lower than this amount.
Mixed feelings from CTO
The original plan was to promote decentralization and loosen the grip on the supply by releasing 1 billion XRP per month. However, CTO David Schwartz isn’t sure the “escrow thing” was a good idea when asked about its effectiveness. The CEO has hinted that they might even burn some of those tokens to strengthen the XRP ecosystem.
What do you think? Can this move finally push XRP’s price higher? Stay tuned!
