Ripple, one of the leading blockchain-based payment protocol companies, has completed its routine monthly process of unlocking and returning XRP tokens to its escrow system. The move, which involved the return of a massive 800 million XRP tokens worth approximately $492.5 million, was executed on January 1, 2024, according to data provided by Whale Alert.
Ripple’s monthly escrow routine
As part of its established practice, Ripple unlocked 1 billion XRP tokens, equivalent to around $610 million, at the beginning of the year. Subsequently, 800 million XRP tokens were returned to the company’s escrow system, marking the recommitment of these digital assets to controlled lockup.
This operation was carried out in two transactions, with the first involving 500,000,000 XRP valued at $308,354,921, and the second featuring 300,000,000 XRP worth $184,222,995. These actions occurred following Ripple’s monthly unlock, which saw 1 billion XRP released in three separate transactions—500 million, 400 million, and 100 million XRP each, as reported by Whale Alert.
Understanding Ripple’s escrow system
Ripple manages its holdings of XRP through a twofold classification: XRP held in its wallets and XRP subject to on-ledger escrow lockups. The latter category consists of XRP tokens that are programmed for gradual release over a span of 39 months. Notably, Ripple does not have immediate access to this locked XRP until it is systematically released to the company each month. A significant proportion of the XRP released is promptly returned to escrow, ensuring a consistent supply mechanism.
The Ripple escrow system was introduced in December 2017 with the primary objective of bringing stability and predictability to the XRP market. This strategic mechanism is designed to operate until the entire 55 billion XRP tokens allocated for escrow have been successfully released.
Market impact and XRP price
At the time of this writing, XRP was trading at $0.62 per token, marking a slight decline of 0.21% within the past 24 hours. The cryptocurrency boasted a market capitalization of approximately $33.56 billion, positioning it as the sixth-largest cryptocurrency by market capitalization. The consistent management of XRP through the escrow system has played a role in maintaining market stability and investor confidence.