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Ripple's CTO Clarifies XRP Circulating Supply Discrepancy

Coin WorldWednesday, Jan 29, 2025 6:06 am ET

1min read

Ripple's CTO, David Schwartz, recently clarified the discrepancy in XRP's circulating supply figures, highlighting the challenges in accurately defining this metric in the cryptocurrency space. An XRP user pointed out differences between the circulating supply figures provided by CoinMarketCap and XRPScan, with CoinMarketCap reporting 57.64 billion tokens and XRPScan reporting 62.23 billion tokens.

Schwartz emphasized that determining the circulating supply depends on specific criteria, stating, "How you measure circulating supply depends on what you consider to be circulating and what you don’t consider to be circulating." He used Bitcoin as an example, questioning whether Satoshi's bitcoins are part of the circulating supply, as reasonable people can disagree on this matter.

The role of Satoshi's Bitcoin holdings is an essential factor in this debate. Satoshi Nakamoto, Bitcoin's enigmatic creator, is believed to own over 1 million BTC. Although these coins are part of Bitcoin's total supply, they have remained untouched since their initial mining, leading many to regard them as effectively out of circulation. CoinMarketCap reports Bitcoin's total and circulating supply as 19.81 million BTC, with Satoshi's holdings considered dormant due to their inactivity over the years.

Ripple's XRP holdings further complicate circulating supply calculations. The native token is divided into two main categories: tokens available in Ripple's wallets and those locked in on-ledger escrows. These escrows release the asset monthly over 42 months, with any unused token returned to the escrow accounts. For tokens held in escrow, Ripple cannot access or use them until they are released, raising questions about whether escrowed tokens should be included in circulating supply calculations.

The debate surrounding XRP's circulating supply and its comparison to Satoshi Nakamoto's Bitcoin underscores broader challenges in the cryptocurrency industry. Standardizing definitions for key metrics like circulating supply is essential for transparency and consistency, particularly as cryptocurrencies gain greater adoption in mainstream finance. By addressing these complexities, Schwartz's comments highlight the need for nuanced discussions about the classification and measurement of digital assets.

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