An important unlocking took place in Ripple. At this point, Ripple, which unlocks 1 billion XRP on the first day of every month, unlocked 1 billion XRP tokens in the escrow system.
On Sunday, September 1, XRP unlocking was carried out in 3 different transactions and 500 million XRP, 200 million XRP and 300 million XRP came into circulation.
The move, which is a long-term strategy by Ripple to manage its token supply, is being made to increase transparency and predictability in the market.
This unlocking is a routine process that occurs every month to provide additional predictability to the XRP supply and will occur regularly every month until February 2027.
Experts have noted that with new XRPs entering the market, a significant sell-off could be imminent, potentially leading to a drop in prices.
Due to this significant amount of unlocking and increased market volatility, the XRP price has started to decline and is trading at $0.547, down 2.1% over the last 24 hours.
Why Did XRP Create Its Escrow System?
Ripple has set the total supply of XRP at 100 billion XRP. Of the total supply of 100 billion XRP, $20 billion has been distributed to Ripple’s developers and core team.
Ripple said the remaining supply of 80 million XRP will be released gradually.
At this point, Ripple states that it uses the escrow account system to provide transparency and certainty to the XRP market. Ripple also locks up a large portion of its XRP assets, ensuring that it cannot flood the market with excess supply and manipulate the price.
However, Ripple also uses the large amount of XRP in escrow accounts to invest in and support projects within the Ripple ecosystem.
Ripple also notes that the monthly release of 1 billion XRP tokens from escrow does not mean that all of the XRP will enter the market. At this point, Ripple may choose to sell some of it to institutional or retail investors, use some for its own purposes, or return some to new escrows.
*This is not investment advice.