On 1 January 2019, Ripple moved XRP worth over one billion US dollars in seven transactions. Fears that XRP whales would manipulate the market were already being voiced. The transactions seem to be related to the ripple escrow.
Centralization, manipulation, pyramid scheme – these are just some of the accusations Ripple regularly faces. Most of the time, it’s about the fact that the company still holds most of the XRP tokens, but at the same time insists on not confusing the company with the token. In 2017, Ripple announced that it holds a total of 55 billion XRP in 55 escrow accounts of one billion XRP each. Ripple wants to ensure a controlled and predictable emission of the tokens. Brad Garlinghouse explains the motivation behind this on Ripple’s website:
“We will use Escrow to create 55 contracts of one billion XRP each that expire on the first day of each month from month 0 to 54. When each contract expires, the XRP will be available for Ripple. You can expect us to continue to use XRP as an incentive for market makers to offer tighter spreads on payments and the sale of XRP to institutional investors.”
Whale Alert to include Escrows in the future
This means that Ripple can theoretically issue a maximum of one billion XRP tokens every month.
“We will then return what remains unused at the end of each month to the end of the escrow queue. For example, if 500 million XRP are not spent at the end of the first month, they […] will be deposited into a new escrow account that expires in month 55.”
The Account Whale Alert recorded seven XRP transactions on January 1st, which stem from this escrow tactic. In total, over $1 billion worth of XRP was shifted back and forth. In the largest transaction, more than $1.1 billion allegedly changed hands.
This transaction appears to be an expired escrow contract. In return, Whale Alert identified further transactions in addition to the creation of new escrow contracts. Whale Alert plans to identify these in the future.
The large transaction volume led to an acute case of FUD among those parts of the Twitter community that did not have Ripples Escrow on their screens.
Join Our Telegram Channel or Follow @CaptainAltcoin