Ripple continues to manage the total supply in a controlled manner by re-locking 800 million XRP. This process has been carried out as part of Ripple’s monthly escrow strategy since 2017 and has sparked mixed reactions in the XRP community.
The 800 million XRP (worth around $2.16 billion) that was released on December 1, 2024, was re-locked by Ripple. The company has been doing this regularly since 2017 to keep the supply in the markets under control. While some investors viewed this step positively, others voiced their criticism and questioned the potential impact of this practice.
Ripple locked 800 million XRP into an escrow account in three separate transactions, preventing these funds from being released on specific dates. Accordingly, 770 million XRP will remain locked until February 1, 2028, and the remaining 30 million XRP will remain locked until March 1, 2028.
This re-locking process has sparked debate in the XRP community over supply and demand dynamics, with some members arguing that such actions could create a supply squeeze in the market, which could in turn increase demand by making it harder for institutional investors to access XRP.
In contrast, a community member named Nellaiwala took a more cautious approach to this idea, stating that Ripple’s escrow system is not actually intended to create a supply shock, but rather to control the speed at which XRP enters circulation. Nellaiwala explained that 1 billion XRP is released every month, but some of it is usually not used and is re-locked. For example, this time, 200 million tokens entered circulation, while 800 million XRP were re-locked.
This mechanism involves releasing 1 billion XRP every month and re-locking unused tokens. An important point is that 800 million XRP have never been part of the actual circulating supply. That is, before and after the release, these tokens remain in reserves controlled by Ripple.
Nellaiwala explains Ripple’s mechanism more clearly with the example of an ATM. The ATM dispenses a certain amount of cash (e.g. $1,000), but if the user does not use all the money, the unused portion is returned. Ripple’s escrow system similarly releases 1 billion XRP every month, while locking the unused portion again. Thus, the XRP supply grows in a controlled and stable manner.
