Ripple’s Escrow System: Not the Price Killer it Seems

With the recent release of 1 billion XRP from its escrow account, many are questioning Ripple’s long-term strategy and whether this system is actually hindering XRP’s price. However, an active member within the XRP community argues that the very act of controlling supply through this monthly release may be a driving force behind the token’s price stability. Here’s why: 200 to 350 million XRP are used each month for Ripple’s payment services and ecosystem projects, with the rest remaining locked in escrow. This strategy was implemented to prevent overwhelming the market while ensuring there’s enough XRP available for real-world payments and services. 1 billion XRP from the 36.5 billion still locked is released monthly, a process that some argue contributes to price stability. While others worry about this pattern of “token dumps” driving down prices, especially when compared with Bitcoin’s approach, there are those who see it as a system designed for long-term growth. An XRP community member believes that the deliberate control over the supply is beneficial in preventing a drastic price drop and may even lead to future price increases if demand rises. Others have proposed burning all escrowed XRP to increase scarcity and drive up prices faster. David Schwartz, Ripple’s Chief Technology Officer, argues against this idea. Instead, he believes that releasing small amounts while demand grows will naturally lead to significant price jumps for XRP.