A bit of mystery and A LOT of misinformation has been going around regarding Ripple’s escrow. This article will unravel any mystery surrounding Ripple’s escrow holdings.
What is an escrow?
Escrow is a feature of the XRP Ledger that allows you to send conditional XRP payments. These conditional payments, called escrows, set aside XRP and deliver it later when certain conditions are met. Conditions to successfully finish an escrow include time-based unlocks and crypto conditions.
The XRP set aside in an escrow is locked up. No one can use or destroy the XRP until the escrow has been successfully finished.
For more information on the escrow function, you can read Ripple’s CTO (David Schwartz) explanation.
Ripple’s initial escrow creation
In December 2017, Ripple created 55 escrows, 1 billion XRP each. Every month, one of these 1 billion escrows would expire, returning the 1 billion XRP to Ripple. Ripple could then use that XRP or return a certain amount to a new escrow.
Ripple’s escrow release history
This is a table showing the release of Ripple’s escrow every month and the amount returned to escrow. In 41 months, Ripple has released 41 billion XRP, of which, 33.7 billion went back into escrow. Ripple has re-escrowed 822 million XRP every month, on average so far.
|Date ending||Amount Released (XRP)||Amount Returned to escrow||Cumulative XRP in escrow|
When Ripple first escrowed the 55 billion XRP, it used 11 different wallets, each holding 5 billion XRP in escrows. At the time of writing, 7 of the initial wallets have 0 XRP escrowed in them, while 8 new wallets have been created.
|Escrow wallets||Amount of XRP in escrow|
Besides spreading its escrow to different wallets, each holding a maximum of 5 billion XRP, Ripple also makes sure that every month, a maximum of 1 billion XRP is in escrow. This applies to any new escrows Ripple creates.
Currently, the last escrow ends in May 2025. Starting from June 2021, up until April 2025, each month a total of 1 billion XRP in escrow will end. For May 2025, 700 million XRP are in escrow. In the next month, when Ripple creates new escrows, it will escrow 300 million XRP ending in the month of May 2025 and the rest for June 2025. This will go on for some time now.
Past and future Ripple escrows
So far 41 months have passed, ending 1 billion in escrow each month. The total amount of XRP in escrow has been reduced by 7.3 billion XRP so far. That is an average of 178 million per month.
Ripple’s XRP sales
Ripple has been very transparent as far as its sales are concerned. Every quarter it publishes a quarterly report that shows exactly how much XRP Ripple sold during that timeframe. As you can see in the graph below, Ripple’s sales (in USD) were the most from Q3 2018 to Q2 2019.
Toward the end of Q2 2019, Ripple announced that it would start using a different approach to XRP volume reporting and that it would take a more conservative approach to XRP sales. Indeed, in the last five quarters, Ripple’s sales appear to be significantly lower.
Whenever you see a news outlet claiming that Ripple is about to dump 1 billion XRP, you should know that that is never the case. Ripple has maintained a very conservative approach with maximum transparency.
As mentioned in the Q4 2019 report, Ripple continues to focus solely on its over-the-counter (OTC) sales with a few strategic partners, who are building XRP utility and liquidity in strategic regions including EMEA and Asia.
Ripple is determined to get more RippleNet members on On-Demand Liquidity and XRP, and it is taking all the necessary steps to achieve that.