Tommorow Ripple will unlock 1 billion XRP from its custody system as scheduled in the XRP Ledger. Ripple’s system raises important questions about financial centralization and the control it exerts in the XRP ecosystem.
Firstly, it’s important to note that the monthly release of 1 billion XRP is a scheduled process that has remained constant for several years, and if everything continues on the same course, it has several more years ahead.
The November 2023 unlock, which involves three transactions of 100 million, 400 million, and 500 million XRP, is the latest example of this programmed strategy.
This unlock accounts for 1.86% of the current circulating supply of 53.56 billion XRP. However, the majority of Ripple’s tokens, approximately 46.43 billion, are still locked in custody and will be released monthly until April 2027.
Ripple Exerts Control at Its Whim
The strategy generates some controversy. Some critics argue that the company should release more XRP to increase its liquidity and promote its adoption.
In addition to accumulation, Ripple’s actions, such as token recapture and XRP sales, have raised concerns.
In October 2023, Ripple unlocked 1 billion XRP, of which they relocked 800 million for future releases.
However, the company spent 205 million XRP tokens valued at $112.75 million. These token sales and movements can influence the price of XRP as they impact supply and demand in the market.
Ripple’s strategy and the influence it wields in the market also underscore the lack of transparency regarding the use of funds obtained from XRP sales and security deposits.
This influence serves as a reminder that, despite the appearance of decentralization in the cryptocurrency ecosystem, companies like Ripple can still exert disproportionate power to the detriment of the user community and market integrity.
Such power goes against the very essence of cryptocurrencies, which is freedom and financial decentralization.
