A recent whale sized transaction was executed on the XRP blockchain worth over $308 million at current prices. The XRP was unlocked from the escrow account at Ripple. Ripple’s Escrow is slightly different from traditional escrows in that it is pre-defined for a large number of accounts for an extended period.
While Escrow is a method of ensuring and adding security to a trade deal by safeguarding the funds with a third party, Ripple’s Escrow 55 billion escrow is used to control the supply of XRP; the third party here is the XRP ledger itself.
$ about to inflate #? 1 bil CRP unlocked.
Ripple’s Escrow Mechanism
Ripple has locked the amount of new XRP to 1 billion that can be released every month into the system. Every month 1 billion XRP is moved from the Escrow account into the system that is controlled by a consensus mechanism. Ripple’s blog post also added that:
“To provide additional predictability to the XRP supply, Ripple has locked 55 billion XRP (55% of the total possible supply) into a series of escrows. These escrows are on the ledger itself and the ledger mechanics, enforced by consensus, control the release of the XRP.”
However, the actual circulating supply is not increased by 1 billion as some of the XRP is moved back to the escrow depending on market conditions.
Furthermore, from the locked amount of 55 billion, 3 billion XRP has already been added to the current circulating supply. According to statistical estimation, at an average of 214.3 million per month, the entire designated escrow supply would run-out by 20 years from now in April 2039. The website also noted that:
“The rate is expected to increase dramatically with utility and adoption.”
South Korean XRP Community Established the Deal?
Moreover, according to the memo of the transaction, the South Korean Ripple community was the forefront this month in increasing the viability this month. The memo read:
“Go! Ripple! and Korean Community! (by XRP factory)”
Therefore, it probably suggests that Korean Ripple branch has established a new deal with XRP at the helm.
Does the Escrow account mechanism and transparency ensure decentralization that was presumed to be lacking from XRP? Please share your views with us.
Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com