Ripple Potentially Sped Up its XRP Distribution Timeline by 21 Years: Crypto Researchers
Crypto researchers allege that Ripple’s XRP escrow math doesn’t quite add up. | Source: Shutterstock
By CCN: CoinMetrics, a firm that analyzes blockchain data for crypto investors, published a bombshell report this week which tells the story of how Ripple Labs has allegedly misrepresented its escrow system. Ripple has effectively misrepresented the amount of XRP transferred back to escrow at least twice. More importantly, the bank-friendly cryptocurrency’s escrow process diverges significantly from the way it was presented initially.
Ripple Escrow System: Not Working As Advertised
Ripple is supposed to take 1 billion XRP out of its fund every month, liquidate what it needs, and return the remainder to escrow. The recovered funds are supposed to go to the end of the escrow line, and 1 billion XRP should be available to Ripple every month. Over time, additional months will be added, as the company doesn’t use anywhere near that amount.
Trust, but verify. 10ks and 10qs will soon be supplemented by standard on chain audits. This is imminent. The ledger is the ground truth. https://t.co/qI2cYBftHm
— nic carter (@nic__carter) May 16, 2019
However, CoinMetrics found that Ripple moves the funds to an escrow contract designated for unlocking much earlier than you would expect.
“In February (month 1) they unlocked another 1 billion XRP and used 100 million of it. Instead of locking another 900 million XRP in month 56 (September 2022), the first month in which no escrow was scheduled to release, the remaining 900 million were escrowed in two different contracts: one of 100 million XRP expiring on month 55,