Ripple's escrow system, which controls the release of XRP tokens, has long been a focal point in the crypto community. With a total supply of approximately 99.9 billion XRP, about 60 billion are in circulation, while roughly 35 billion remain locked in escrow under Ripple's management. This setup aims to prevent market flooding but often sparks debate over its impact on price growth.
A recent thought experiment referenced by TheCryptoBasic, using Google Gemini, explored a hypothetical scenario where Ripple reduces the total supply by 20%, or about 19.98 billion tokens, all from the escrow. This would lower the total supply to 79.92 billion XRP and shrink the escrow to around 15.02 billion tokens, while the circulating supply stays unchanged at 60 billion. The immediate trading environment would not shift, but future supply would be constrained, potentially creating long-term bullish pressure.
Gemini's model, described as ultra-bullish, assumed ideal conditions like strong market optimism, favorable regulations, and increased adoption of the XRP Ledger for global payments. Under this scenario, the market cap could theoretically climb to $4 trillion, nearly a 28x jump from the current $144 billion. Dividing this by the circulating supply of 60 billion tokens yields a hypothetical price of $66.67 per XRP, a 27.8x surge from the current $2.40 level. However, Gemini emphasized this is purely theoretical and not a prediction, as real-world factors like demand and utility are critical.
Ripple CTO David Schwartz has previously addressed such ideas, noting that token burns do not always guarantee price increases. He referenced Stellar's 2019 supply burn, which failed to deliver a lasting impact, highlighting that supply reduction alone may not drive prices higher without sustained demand. The ongoing debate around Ripple's escrow continues to shape investor perception, emphasizing how supply control influences XRP's value in crypto economics.
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