The recently locked XRP tokens are part of the 1 billion coins previously released from the Ripple escrow wallets.
Ripple has returned 700 million XRP tokens to escrow shortly after releasing 1 billion tokens to address liquidity demands for May. As highlighted by Whale Alert, a reliable whale-tracking resource, the transactions occurred sixteen hours after the assets were initially released from escrow.
Recall that Ripple released the 1 billion XRP tokens from escrow yesterday at midnight (UTC). As previously reported by The Crypto Basic, the California-based firm unlocked these assets in two transactions, each involving 500 million XRP.
Sixteen hours after the first batch of 500 million XRP was released, Ripple transferred 300 million tokens to another one of its wallets. These tokens are intended to serve the liquidity demands for the ongoing month. The remaining 200 million XRP tokens were moved back to the escrow wallet and locked. These represent the 500 million tokens moved by Ripple.
? ? ? ? ? ? ? ? ? ? 200,000,000 #XRP (91,515,614 USD) locked in escrow at Ripple Escrow wallet https://t.co/6xN3aGiBoc
— Whale Alert (@whale_alert) May 1, 2023
The second batch of 500 million XRP was also returned to the escrow wallet sixteen hours later, with no portion released to the market. Shortly after sending them back to the escrow wallet, Ripple locked these 500 million tokens on May 1, 16:31 (UTC).
? ? ? ? ? ? ? ? ? ? 500,000,000 #XRP (228,930,155 USD) locked in escrow at Ripple Escrow wallet https://t.co/r7RLi5ZfuU
— Whale Alert (@whale_alert) May 1, 2023
As a result, 700 million XRP in total was sent back to escrow, and 300 million was released to the market. However, the 300 million XRP tokens released to cater to liquidity demands have not been moved and remain in the recipient address. The address now holds 746 million XRP tokens.
Notably, for April, this address only sent out 50 million XRP tokens from the 300 million XRP tokens it received for that month and retained the rest of the assets.
What Happens When Ripple’s XRP Escrow Runs Out?
These recent transactions are not uncommon, as Ripple typically carries out similar transfers every month. For February, the Silicon Valley firm locked back a total of 600 million XRP tokens and released 400 million to the market. This practice has continued since 2018.
Recall that the initially locked tokens amounted to 55 billion. Mathematically, the escrow accounts should eventually run out of XRP tokens. Proponents have asked, “What happens then?” David Schwartz, CTO at Ripple, answered this question on Quora.
Schwartz acknowledged that Ripple would eventually run out of the initial supply of XRP allotted to it by the founders of the XRP Ledger. However, he noted that by that time, the company would have gotten other sources of revenue and business models to keep it going.
He revealed that Ripple’s mission is to distribute XRP to the market. As reported by The Crypto Basic, the company sold $2.93 billion worth of XRP to its On-Demand Liquidity (ODL) partners for the first quarter of this year. Schwartz emphasized that once the XRP in Ripple’s escrow runs out, it will show that the firm has completed distributing the assets.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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