The recent news about large-scale unlocking of XRP has attracted widespread attention, especially retail investors who have begun to feel uneasy. According to relevant reports, the XRP custodial wallet unlocks 1 billion tokens every month according to the set plan. The 1.95 billion fine this time has attracted people's attention to the subsequent unlocking situation.
It should be emphasized that this unlocking is not a one-time release of 1 billion XRP, but is carried out in batches. Specifically, 500 million of them will be directly unlocked to liquidity custody, while the remaining part will not be released directly. It is worth noting that unlocking does not mean that all unlocked tokens will immediately enter the market, as the unpurchased portion will be reallocated to new smart contracts.
According to Ripple’s mechanism, up to 1 billion XRP will be unlocked every month starting in December 2017. This is achieved by placing 55 billion XRP into 55 escrow contract accounts, each containing 1 billion XRP. On the first of every month, an escrow contract account is unlocked for businesses to purchase. XRP that has not been purchased will be reallocated, which helps control the circulation of XRP to prevent oversupply in the market.
