Ripple Labs and the XRP Token Release Strategy
Ripple Labs, known for being the largest holder and issuer of XRP, has implemented a strategic approach to gradually release additional tokens over the years. This method has been a key factor in maintaining the digital asset’s slightly inflationary nature since its inception.
The Escrow System: A Controlled Release
In 2017, Ripple Labs enhanced its token release strategy by introducing an escrow system. This system plays a crucial role in maintaining a controlled inflationary environment for XRP. At the beginning of each month, Ripple unlocks 1 billion XRP. Out of this, they make 20-30% available for trading, which equates to 200-300 million tokens. The remaining tokens are re-locked, ensuring a steady supply while allowing Ripple to raise funds for its operations.
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Potential Changes in XRP Token Distribution
As of March 2025, there are indications that Ripple may be altering the proportion of tokens released. According to Finbold, Ripple is considering a sale of up to $795 million worth of XRP. This adjustment coincides with an increase in the circulating supply, which has been growing at an accelerated rate.
Data retrieved by Finbold using the Wayback Machine revealed that the circulating supply of XRP increased from 56.5 billion tokens at the start of 2023 to 58.6 billion at the beginning of 2024. By March 5, 2025, the supply had risen to 62.8 billion, suggesting an annual unlock rate of 4 billion tokens, based on insights from XRPscan.
The Evolution of XRP Circulation
Since its launch in 2012, XRP’s circulating supply has grown significantly. Starting with 20 billion tokens, it has now increased by nearly 43 billion, while 37 billion remain in escrow. This controlled release system indicates that Ripple’s strategy is likely to continue for the foreseeable future.
Is XRP Inflation the Token’s Main Price Driver?
While monthly unlocks of 200-300 million XRP, valued at approximately $500-$700 million with a price of $2.46, could exert selling pressure, they have not been the primary price influencers. Instead, the ongoing SEC lawsuit against Ripple, initiated in 2020, has been a significant factor suppressing the token’s value.
External factors also play a role in XRP’s price volatility. For example, the cryptocurrency market experienced a rally following Donald Trump’s re-election and anticipated changes in U.S. policy towards the industry. However, subsequent challenges have hindered sustained upward momentum.
Current Market Dynamics and Future Prospects
Despite hopes for the current administration, the lack of progress in establishing a strategic cryptocurrency reserve has prevented XRP from maintaining its recent highs. As of its press time price of $2.46, the token is down 15.48% year-to-date.
Nevertheless, early March could bring a significant rally as the SEC has been dropping cases, leading many traders to speculate that the battle against Ripple might soon conclude. Additionally, President Trump’s renewed discussion on a strategic cryptocurrency reserve on March 2 sparked a short-lived rally, demonstrating the market’s sensitivity to policy changes.
