Is Ripple’s Data on XRP Circulating Supply and Inflation Fake? Messari Report Suggests

XRP Price Prediction
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Is Ripple’s Data on XRP Circulating Supply and Inflation Fake? Messari Report Suggests

The cryptocurrency Exchanges were accused of ‘fake reported volume’ which was a demerit for the entire crypto-markets. However, the fake reported volume data did not have any significant impact on price. This is because ‘wash trading’ is used to increase the apparent volume of Exchanges only.

However, it does create an illusion of a lot of value being traded on the Exchanges and the cryptocurrencies. According to research by Florent Moulin, published on the Messari site, Ripple might be using the fake reported data to mislead the investors into something bigger.

The report compared the Q1 financial report submitted by Ripple with their estimates. The most important highlight from their report was,

They [Ripple] may mislead investors because key information regarding sales and estimated trading volumes significantly understate the pace of selling pressure from Ripple and its founders and affiliates. We find that XRP’s circulating supply inflated by 11.5% in the past six months vs. the 4.5% implied by its API.

According to Ripple, it made $169 million from these combined sales, with two-thirds of that sold on defined exchanges and the rest coming from direct institutional sales in Q1 2019.

Moreover, the company’s Q1 2019 reported sales represented 0.32% of the global XRP exchange trading volume from the quarter, up from 0.24% in Q4 2018, according to data from CoinMarketCap.
xrp distribution estimate
Estimated Distribution of XRP (Source
However, the research estimates found a lot of hogwash in the report. As they are considering the volume from CoinMarketCap data, they are incorrectly calculation their sales. Moreover, the research also found that XRP is still most primarily been held by its creators and Ripple.
we believe that more than 75% (75 million) of the current XRP outstanding supply (units identifiable on-chain) is currently managed by Ripple and its founders and affiliates. Circulating supply data is sourced from known on-chain addresses. 
The value presented is our best estimate for the Maximum circulating supply of XRP.
Last but not least, Ripple is due to submit its Q2 report in the near future. According to CoinMarketCaps data, the sales at Ripple has been just short of the volume recorded in Q4 of 2017, when Ripple was trading at around $3.
XRP inflation
XRP Inflation – Reported and Real (Source)
However, the research points otherwise, if the deflation in XRP is as high as it is projected, the selling pressure from the creators might be much larger. Moreover, it also puts significant doubts on the security laws on XRP.
Do you think that Ripple will come out clean from these allegations? Please share your views with us.
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Is Ripple's Data on XRP Circulating Supply and Inflation Fake? Messari Report Suggests
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Is Ripple's Data on XRP Circulating Supply and Inflation Fake? Messari Report Suggests
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The cryptocurrency Exchanges were accused of 'fake reported volume' which was a demerit for the entire crypto-markets. However, while the fake reported volume data did not have any significant impact on price. This is because 'wash trading' is used just to increase the apparent volume of Exchanges. 
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Author: Nivesh Rustgi

Nivesh from Engineering Background is a full-time Crypto Analyst 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

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Nivesh Rustgi 642 Articles

Nivesh from Engineering Background is a full-time Crypto Analyst 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

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