The XRP community as a whole is known to stay as a tight-knit group with a single-minded focus to propagate the cryptocurrency. Taking on this mission has also allowed Ripple to work in other areas of the organization such as escrow accounts.
The concept of Ripple’s escrow has become of paramount importance during the cryptocurrency‘s current tenure. This was the reason why Ripple re-released their blog post on the XRP escrow, written by David Schwartz.
In the Ripple Insights blog, Schwartz talked about how 55 billion XRP was locked away in a series of escrows to provide additional XRP predictability. To make sure there is a track on all XRP, the escrows are built on the ledger itself. According to Schwartz:
“The escrow consists of independent on ledger escrows that release a total of one billion XRP each month over the next 55 months. This provides an upper limit on the amount of new XRP that can be brought into circulation. The amount of XRP actually released into circulation will likely be much less than this.”
The key concept of the escrow technology was that if there was any additional XRP leftover each month, then they will be placed into a new escrow. Ripple has doubled down on the escrow part of the company because of multiple rumors surrounding it.
According to the latest reports, the last 1 billion XRP escrow ended this month. Ripple has also stated that in the upcoming 30 months, there will be two escrows of 500 million XRP each. Ripple has claimed that if an escrow is successfully finished, then it delivers the XRP back to its destination account. This ensures that the security and integrity of the ledger are always maintained.
The escrow system works by including three types of transactions and one type of ledger entry. In the blog post, Schwartz touched upon source and destination tags within the escrow ecosystem. These tags act as reliable ways to support hosted accounts on behalf of its customers.
Ripple has stated frankly that it expects escrows to be used for higher-value “one-ledger and cross-ledger atomic payments”. By implementing escrows, the XRPL provides payment channels for a lower value, off-ledger payments, and micropayments.
The XRP escrow lock-in also helped in stemming XRP’s price slide. Most of the XRP escrow tranches were now locked, allowing the system to remain stable. Ripple last unlocked their escrow on January 1 when tokens worth $192 million was released.
