Why is Ripple is keeping 60% of the generated XRP tokens in Escrow?

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With a total of 99,993,093,880 Ripple (XRP) coins supply and a daily circulating amount of around 38,739,142,811 coins. The company still has 55 billion coins, translating to about 60% of the total XRP produced to date, deposited in escrow.

With the market cap of XRP standing at $44,735,187,335 USD as at 17th January, 2017. The release of the 55 billion XRP would be a great boost considering that at the moment a single XRP is going for $1.15 USD.

But why is Ripple (XRP) retaining 60% of XRP?

With majority of Ripple’s revenue sources still remaining unknown, selling of the 55 billion XRP to investors sounds like the best way to gain funds. The only known source of revenue for Ripple is some banks which are said to pay millions for the Ripple software.

Apart from giving the company a market value of about $63 billion. Is there any other importance of holding the XRP?

Am sure this is quite a hard question especially for an ordinary person to grasp since you would expect Ripple to make the XRP available so that investors can find more coins to invest in. However, in the world of cryptocurrency that isn’t the case. The developer has to control the amount of tokens being released into the market to avoid a sudden flooding of the market.

Ripple actual target is to release a maximum of 1 billion XRP Into the market monthly; which they have never achieved. The average XRP tokens that the company has managed to sell since it was released is about 300 XRP per month.

Having the 55 billion XRP laying idol however, gives the company with only 170 employees a rare flexibility of acquiring money quickly in case they need to und a new project.

Does this translate to any benefits for the average Ripple (XRP) user?

For sure no company can carry out any activities without taking its investors into considerations. Ripple surely have the investors at heart when making this decision of retaining such a huge amount of coins and also by regulating the total amount of coins they can release in a month.

By “siting” on the 55 billion XRP coins, Ripple ensures that its future is secured. It has a ready source of funds in case of anything. It won’t have to go begging for cash from investors who at that time may not be willing to offer it with funds.

Again, by setting a cap at 1 billion XRP releasable to the market monthly, Ripple is sure it would never flood the market causing a crush of its cryptocurrency coin.



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