January 3, 2024

Ripple Liquidates Over $200 Million Worth of XRP in December

In December, Ripple, a major XRP seller, leveraged its monthly unlocked reserves to fund operational activities and compensate team members.

As of December 21, Ripple had sold 240 million XRP, equivalent to $148.8 million. This surpassed the monthly unlocked and held amount by 40 million tokens, indicating a systematic liquidation of reserves.

Continuing its sell-off trend, Ripple further divested 70 million XRP on December 27. The total amount liquidated in December reached over $208 million, with remaining reserves still holding millions of dollars.

Ripple initiated the process by transferring 200 million XRP to its reserves on December 1. Subsequently, two transactions of 60 million tokens each occurred on December 6 and 12, followed by a 120 million XRP payment on December 20.

Typically, Ripple allocates a portion of its monthly unlocks to the 'Ripple (1)' account, constituting its treasury reserves. The remaining funds are then relocked into new escrows, programmed to mature in the coming years for future sell-offs.

The sell-offs involve transferring funds to an unidentified-owner address, 'rP4X2…Kxv3', which then redistributes the funds across various anonymous addresses, likely owned by the same entity. Ultimately, the XRP tokens find their way to centralized exchanges for liquidation.

About 26.34 million XRP ($16.33 million) were presumably sold in the last days of 2023.

This month's liquidation events mark one of Ripple's most substantial sell-offs in 2023, raising speculation about potential ongoing sell-offs. The company has not provided any disclosures regarding the increased volume.

Furthermore, Ripple retains ownership of around 45.90 billion XRP currently locked in escrows scheduled to mature by 2027, making it the largest XRP holder. This significant holding positions Ripple as a major source of selling pressure, directly influencing the investment values of its token.

On January 1, Ripple unlocked 1 billion XRP, valued at $630 million. Each month, Ripple unlocks another 1 billion tokens. The company often retains only a fraction of it for its treasury, frequently selling the rest on the market.

These sales contribute to XRP's supply inflation as the unlocked tokens circulate monthly. Ripple's ability to impact the economic dynamics, future price, and value of its token has been previously reported.

Critics have scrutinized Ripple Labs, the entity behind XRP, citing concerns about XRP's strong centralization, initial distribution, and the focus on RippleNet. Questions about transparency, alleged misleading marketing, and self-enrichment schemes have also been raised. Notably, Ripple operates without a proof-of-work or proof-of-stake consensus mechanism, relying on a consensus protocol controlled by a limited number of validators, leading some to argue that it functions more as a centralized payment network than a traditional blockchain.

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