CommonLounge Archive

Ripple Distribution

October 17, 2017

Ripple pre-mined 100 billion XRP at the inception of the blockchain and designed the protocol such that no more XRP can be created. The company holds 61 billion of all XRP, but has locked them in smart contracts that only allow a release of 1 billion XRP each month.

Because the company holds the lion’s share of the coin, anything that makes the price plummet is not good for them. This means that they would not want, for example, to sell their holdings all at once, which would increase supply and crash the price. Corporations can invest in Ripple the company directly, but individuals can only invest by buying and holding XRP.

Destruction of XRP

Whenever a transaction is validated and 0.00001 XRP is burnt, it means that the supply of all XRP in existence reduces by a little bit. However, the rate of destruction is not enough to cause deflation as it is negligible in the short and long term. At current rate, roughly 8,000 XRP is destroyed daily, and it would take about 100 years at the current rate to destroy about 0.3% of all XRP. By the time the supply is significantly reduced, it is likely that the blockchain technology itself will be a thing of the past!

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