Every first day of the month, Ripple continues to unlock 1 billion XRP from a programmed escrow system within the XRP Ledger. This process will take place again on October 1st (Sunday) with three transactions of 100 million, 400 million, and 500 million XRP, respectively.
In particular, the unlocking of October 2023 signifies a portion of the remaining 46.69 billion XRP tokens still locked in escrow, which Ripple owns and will be released monthly until February 2027, and accounts for 1.87% of the current circulating supply of 53.31 billion XRP.
Current State of Ripple Wallets
There are three escrow wallets held by two known wallet addresses under Ripple’s control that will be unlocked in the final minutes of September:
- Address “Ripple (22)” – Locked on July 1, 2019, with 500 million XRP to be unlocked.
- Address “Ripple (23)” – Locked on July 1, 2019, with 100 million XRP to be unlocked.
- Address “Ripple (23)” – Locked on August 1, 2019, with 400 million XRP to be unlocked.
These two addresses currently hold 5 billion XRP tokens for the monthly escrows to be added within the next five months, until February 29, 2024.
Why Did Ripple Create the Escrow System?
When XRP emerged in 2012, the total supply was limited to 100 billion XRP. 20 billion XRP were initially allocated to the creators and core team and subsequently distributed.
Ripple took control of the remaining 80 billion XRP in Ripple wallets and promised to release them gradually, instead of all at once. In 2017, Ripple introduced a new system to make the release of XRP more predictable and controlled.
This system was described as an escrow system, which is a type of smart contract that locks XRP and makes it impossible to use unless certain conditions are met. Ripple’s condition was to release 1 billion XRP every first day of the month for a total of 55 months, amounting to 55 billion XRP.
However, even though 1 billion XRP is released monthly, Ripple did not spend or consider selling all of it. Instead, Ripple shares that it locks the remaining tokens each month into new escrow wallets for future releases. This has extended the 55-month period for all XRP to be in circulation.
What Happened to 1 Billion XRP in September?
As expected, 1 billion XRP tokens worth $500 million were released from the escrow wallets on September 1st. Ripple then rapidly relocked 800 million tokens (80% of the total amount) into escrows that will be released until January and February of 2027.
Out of the remaining 200 million XRP, 100 million tokens were spent on September 11th amidst a price drop following news of FTX’s asset liquidations the day before.
Six days later, on September 18th, 75 million XRP were spent, and on September 22nd, 50 million tokens were added to circulation. The mentioned 50 million tokens consist of the remaining 25 million XRP from September’s escrows and 25 million tokens from previous releases.
