On the first of every month, Ripple unlocks 1 billion XRP tokens from an escrow system programmed into the XRP Ledger. This transaction will occur again on October 1 with three transactions of 100 million, 400 million and 500 million XRP. Here are the details…
Important “unlock” event in the XRP ecosystem
Specifically, the October 2023 unlock will have 1.87% of the current circulating supply of 53.31 billion accrues to some of the billion XRP tokens. There are three escrows held by two known wallet addresses under Ripple’s control:
- Address “Ripple (22)” – To unlock 500 million XRP locked on July 01, 2019 with transaction ID “D0C3E…7568F”.
- Address “Ripple (23)” – To unlock 100 million XRP locked on July 01, 2019 with transaction ID “532CD…1E4D2”.
- Address “Ripple (23)” – To unlock 400 million XRP locked on August 01, 2019 with transaction ID “574D0…25F89”.
These two addresses still have 5 billion XRP tokens available for monthly escrows that will be completed over the next five months by February 29, 2024. When XRP was created in 2012, the XRP ledger limited the total supply to 100 billion XRP. Of this, 20 billion XRP was initially distributed to the creators and the core team. Ripple’s treasury controlled the remaining 80 billion XRP and promised to release these coins gradually, rather than all at once. In 2017, Ripple implemented a new system to make the issuance of XRP more predictable and controlled.
What’s behind the lock system?
This system uses escrows, a type of smart contract that locks XRP and makes it impossible to use it unless certain conditions are met. Ripple’s condition was to release one billion XRP on the first day of each month for 55 months, for a total of 55 billion XRP. However, even though one billion XRP was released monthly, Ripple did not spend or sell all of it. Instead, Ripple reportedly locks remaining tokens each month into new escrows for future releases. This extended the 55-month period for all XRP to be put into circulation.
1 billion XRP tokens worth $500 million were made available on September 1, as expected. Ripple then immediately re-locked 800 million (80%) of the total into escrows to be completed by January and February 2027. Of the 200 million XRP left, 100 million tokens were spent on September 11 amidst a price crash following news of FTX’s asset liquidations the day before. Six days later, on September 18, 75 million XRP was spent and on September 22, another 50 million altcoins were put into circulation. So, out of the remaining 25 million XRP from September escrows and another 25 million tokens from past releases came into circulation.
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