Sun. Aug 14th, 2022

The XRP army is currently on pins and needles. Ripple has unlocked 1 billion XRP, worth more than $225 million, from its escrow wallet, according to Whale Alert on Twitter. It’s par for the course for the blockchain cross-border payment startup to move funds every month. Nonetheless, investors can’t help but wonder if it’s time to hit the panic button, fearing Ripple will dump the supply back into the market and send the price tanking even further. XRP continues to get pounded in the cryptocurrency market, posting losses year-to-date while bitcoin and other top-10 cryptocurrencies are on track for gains in 2019.

Source: Twitter

Ripple controls roughly 50% of the XRP supply. They disclosed at year-end 2017 that they would be moving 1 billion XRP monthly over the course of 55 months, but still not everyone in the crypto community is used to it. To do so, the company earmarked 55 billion XRP in total from its share of the third-biggest cryptocurrency. The company even explained when it began this practice:

“This provides an upper limit on the amount of new XRP that can be brought into circulation. The amount of XRP actually released into circulation will likely be much less than this.”

But with the XRP price down 40% year-to-date, XRP investors, who are part of what’s been dubbed the XRP Army, can’t help but speculate on whether it could mean further pain for them. After all, XRP is supposed to be a decentralized cryptocurrency, but with Ripple controlling so much of the supply, investors can’t help but blame the blockchain startup for the lackluster price.

Source: TradingView

XRP has also found itself smack dab in the middle of the security debate, though Ripple CEO Brad Garlinghouse maintains that XRP is “solving a real problem” and therefore is a utility.

Source: Twitter

Meanwhile, according to responses on Crypto Twitter, the XRP in question that is moved from escrow is allocated across:

  • Institutions
  • Market
  • Projects
  • Returned to escrow wallet

Ripple and XRP

Uncertainty surrounding whether Ripple decides to redirect a large percentage of the XRP back to its escrow wallet aside, the practice does place a spotlight on not only the security issue but also decentralization. Ripple no doubt is taking a longer-term view and is releasing the coins with the mission of mainstream adoption in focus. The XRP army, however, can’t help to become bitter as other cryptocurrencies including bitcoin that despite volatility enjoy gains while the XRP price is stuck in the doldrums. One of the major points of contention is Ripple’s role as a validator node on the XRP Ledger Consensus Protocol.

But according to data from the Validator Registry, Ripple only controls one-fifth of the validator nodes, meaning more than three-quarters of validator nodes are performed by third-parties. This is seemingly a step toward greater decentralization of the XRP cryptocurrency.

Ripple bolstered its profile earlier this year with its investment in traditional cross-border payments company MoneyGram. In recent days, Ripple bolstered its stake with another $20 million, bringing its total investment to $50 million.  According to the terms of the deal, MoneyGram will use Ripple’s xRapid product and XRP for cross-border settlements.

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