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HomeCrypto NewsMarketFlawed Reporting Raises Concern About Unlocking Billions of XRP

Flawed Reporting Raises Concern About Unlocking Billions of XRP

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At current prices, Ripple still holds about $17.9 billion worth of XRP, which it will unlock over the project’s lifetime.

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Ripple is yet to unlock about $17.9 billion worth of XRP at current prices in the XRP Ledger’s lifetime.

This is according to a recent report by Token Unlocks, which highlights the list of projects with the highest value of tokens locked. Notably, XRP tops the list.

However, a misunderstanding may have caused prominent Twitter crypto news outlet Wu Blockchain to recently report that all of these tokens will be released in 2023, sparking concerns about the impact on XRP’s circulating supply and price.

Token Unlocks, responding to the Twitter news outlet, has clarified that these tokens will be unlocked over the project’s lifetime, NOT in 2023 alone. In some instances, this is over 100 years.

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It is important to watch for token unlocks in the world of crypto as they increase the circulating supply of a token, which could conversely impact the price. A token’s price tends to decrease by as much as 15% before a token unlocks event and stay relatively flat afterward, per Token Unlocks analysis.

It is worth noting that XRP has a total maximum supply of 100 billion tokens. In December 2017, Ripple Labs locked up 55% of this supply in escrow accounts on the XRPL to carefully increase the circulating supply and maintain liquidity. These escrow accounts release 1 billion XRP each month, most of which the company buys back and locks in a new escrow when not needed.

 

Ripple unlocked 1 billion tokens at the beginning of the year as part of this plan. As highlighted in the company’s Q3 2022 report, it now holds less than 50% of XRP supply in escrow from the initial 55%, indicating an increase in XRP demand.

At press time, XRP exchanges hands for $0.411 with a 50.7 billion token circulating supply.

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Okoya David
Okoya David
Okoya David Kio is a crypto enthusiast passionate about understanding what makes the nascent market tick. When he's not pondering about cryptocurrencies, you might find him in a BP debate room trying to proffer solutions to age-old societal problems.

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