The article highlights Ripple's strategy of managing the monthly release of XRP and its ramifications for the cryptocurrency market.
XRP Escrow Release Process
Ripple manages its XRP through an automated escrow system integrated into the XRP Ledger. Each month, 1 billion XRP are released, but these coins do not flood the market. Instead, over 80% is immediately reinvested into new escrow accounts, ensuring control and security. The remaining 10-20% is allocated for Ripple's operational expenses, liquidity management, and support for strategic partnerships. This approach prevents sudden supply shocks and ensures the long-term sustainability of XRP in the market.
Operational Expenses and ODL Platform
A portion of the released XRP is dedicated to operational use which significantly strengthens the On-Demand Liquidity (ODL) platform. This enables financial institutions to perform near-instantaneous and cost-effective international transfers. Institutions convert local currency into XRP, transfer it, and convert it back to local currency in the target country, minimizing XRP retention for speculation and diminishing its long-term price impact.
Market Dynamics of XRP
XRP has shown significant performance in the market, outperforming Bitcoin and Ethereum with a 335.1% annual return in 2025. January saw a 46% rise, followed by a 29.3% dip in February. Moderate fluctuations occurred in subsequent months. Despite recent short-term declines, XRP's potential for long-term growth and expanding real-world applications remains promising.
Ripple's strategy for managing XRP and its use in financial operations positively influences the market, despite short-term price fluctuations.
