XRP News Today: Ripple Maintains 40 of XRP Supply in Escrow to Stabilize Price

Ripple’s XRP escrow mechanism continues to draw attention from analysts and observers, particularly as crypto researcher SMQKE recently highlighted its intended function in maintaining price stability [1]. According to the 2017 documentation, Ripple Labs committed to locking up 55 billion XRP in a cryptographically secured escrow account through smart contracts. This move was explicitly designed to prevent large-scale releases of XRP that could cause abrupt price declines and introduce market uncertainty [1]. The system ensures a steady, controlled supply by releasing 1 billion XRP per month over a 55-month cycle, with any unused tokens returned to escrow under a renewed contract [1].

The escrow mechanism operates with time-bound and automated constraints, meaning Ripple cannot access or sell the escrowed tokens arbitrarily. Access is dictated solely by preprogrammed smart contracts on the XRP Ledger, reinforcing a fixed and transparent release schedule. As of July 2025, nearly 40% of XRP’s total supply remains in escrow—approximately 35.9 billion XRP—while an additional 4.85 billion XRP are held outside circulation by Ripple [1]. This structure limits the company’s immediate liquidity, aligning with its goal to promote a more predictable market behavior for XRP.

A key feature of the escrow system is the reentry of unused XRP into the cycle. At the end of each monthly release period, unutilized tokens are returned to the escrow system, resetting the 55-month countdown from the date of reentry. This rolling mechanism ensures that liquidity is balanced with market stability, preventing potential shocks from sudden supply increases. SMQKE’s commentary emphasized that even after being released, unused XRP is not immediately available for market transactions, reinforcing the idea that Ripple is not free to sell the tokens at will [1].

The original 2017 documentation also outlined Ripple’s broader vision for XRP, including its use in incentivizing market makers and reducing spreads between currency pairs, primarily targeting institutional investors. This approach highlights XRP’s intended role in financial infrastructure rather than speculative trading, further supporting its long-term stability and adoption [1]. SMQKE underscored the system’s transparency and verifiability, encouraging stakeholders to review the original documentation and smart contracts for clarity.

Ripple’s structured release of XRP and its cryptographic enforcement of supply control remain central to the token’s design. The mechanism’s emphasis on predictability and controlled liquidity aims to reduce volatility and build confidence in XRP’s utility across financial applications. As the market continues to evolve, the impact of these safeguards on XRP’s price trajectory will remain a key point of analysis for investors and market participants.

Source: [1] Here’s How Ripple’s Escrow Protects XRP Price (https://coinmarketcap.com/community/articles/6895fe24e21b950c870dd34c/)