Ripple escrow wallet releases another 1 billion XRP

On August 1st, another large transfer alert sounded on Twitter, as 1 billion XRP were moved out of Ripple's custody wallet, sparking criticism within the crypto community. Many believe this to be another instance of a whale dumping coins.

Major Whale Alert
According to data released by Twitter alert, the funds, valued at over $320 million at the current market price, will be unlocked after midnight on August 1st.

The news of 1 billion Ripple coins entering the market is unlikely to be welcomed by the crypto community. Many Twitter users believe this to be a classic "pump and dump" scheme orchestrated by Ripple official.

Since its inception, Ripple has faced continuous criticism for its token distribution ratio and overly centralized mechanism. Over the past few years, Ripple has been accused of selling billions of tokens to boost institutional profits, leading XRP holders to suffer significant losses.

🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 🔓 1,000,000,000 #XRP (320,072,524 USD) unlocked from escrow at Ripple Escrow wallet

Tx: https://t.co/iF8nI5bvJ4

— Whale Alert (@whale_alert) August 1, 2019

Many users express concerns that the token sale will further impact Ripple's current weak price. Critics even argue that this move is no different from central banks printing money leading to inflation.

According to data from Coinmarketcap, Ripple's price has not shown significant fluctuations since the alert was issued, hovering near the bottom reached in December last year.

Ripple's Official Escrow Mechanism

However, criticisms of Ripple were quickly met with counterattacks from supporters who stated that these "sales" occur regularly every month. The transaction is part of the monthly escrow set by Ripple official.

Everyone blows up when this happens; it is a monthly escrow release. On average, 75-80% of XRP (800 Million) is returned The 80% that is returned, will be placed back into another 55 month escrow. They have a 30 year plan to distribute the supply; this is not a "Pump & Dump".#XRP

— 🧠Dakota Shipley🫀 (@DakotaDS) August 1, 2019

Reports indicate that in a statement released in December 2017, Ripple official explained:

A total of 55 billion Ripple coins, representing 55% of the potential total supply, are locked in a series of escrows, with the ledger mechanism controlling the outflow of Ripple coins. 1 billion tokens are released from escrow monthly, lasting for 55 months, and will expire in the middle of 2021.

Although most of the escrowed tokens will be sold, Ripple revealed that some of the released funds will be used to support the improvement of the XRP ecosystem.

Despite previous reports indicating a nearly 48% increase in total sales in the second quarter due to institutional investments, amounting to approximately $251 million, the overall price has not seen improvement.

Related Reading

• First thing that comes to your mind? Bitcoin surpasses "stocks" in Google searches
• Former bank executive says the world cannot ignore Bitcoin's political implications

Join now to get the most comprehensive fintech information, blockchain insights, and industry examples!