Ripple update: Just a thought
So I was reading Hodor’s new blog post yesterday titled [“The Fun Factor: Promoting XRP Adoption and Usage](https://xrpcommunity.blog/the-fun-factor-promoting-xrp-adoption-and-usage/)” and it was ,of course, another great and insightful piece by the guy. I came across something I thought was interesting and I wanted to get some other opinions on it. Down under the paragraph labeled “Developers” there are some links provided, other than the Codius site I hadn’t been to them before so I clicked on the first one labeled [Ripple’s Development Center](https://developers.ripple.com/index.html). From there I clicked on Understand XRP Ledger Concepts and then XRP Ledger Overview and it brought me to [here](https://developers.ripple.com/xrp-ledger-overview.html). A great link for people to check out who have questions on XRP btw. But down in the 3rd bullet point of the paragraph titled *Finite XRP Supply* it states ^(“Ripple (the company) holds a large reserve of XRP in escrow. At the start of each month, 1 billion XRP is released from escrow for Ripple to use. (Ripple uses XRP to incentivize growth in the XRP Ledger ecosystem and sells XRP to institutional investors. Ripple also sells XRP programmatically on exchanges, limited to a small percentage of overall exchange volume”)
So here are my thoughts and questions: Ripple has stated before how important speculative investors are to the XRP ecosystem now because they provide liquidity and there needs to be liquidity for it to have a chance of being adopted. Once it is adopted institutionally the small group of retail investors will not be the main liquidity providers to the ledger I would assume. In the quote above it states that XRP will be sold to institutional investors and that it is sold programmatically to exchanges but limited to a small percentage of the overall exchange volume. (a little unclear on the exchange volume part is that for each exchange or the XRP ledger decentralized exchange?.) Since the main purpose or goal of XRP is to be used institutionally as a bridge asset essentially behind the scenes and they are mainly selling to institutional investors this sounds to me like the amount of XRP available on exchanges to retail investors will be limited. Maybe not right now but at a certain point. Does this mean that retail investment was used to build initial liquidity and possibly once it is adopted institutionally and the liquidity is there for banks to be using it XRP won’t be sold to exchanges anymore? The reason I ask that is because I would think if supply to retail investors was eventually cut off off to a valuable asset that is being used institutionally, the demand would increase from a retail investors standpoint since only some of the first people invested in it own it. I’m basically just thinking out loud here and I think that even that scenario of it possibly not being sold to exchanges anymore could be years down the road still. Just looking for other opinions I don’t necessarily think that is how it will play out but had to ask a few questions.
About Ripple (XRP)
Ripple connects banks, payment providers and digital asset exchanges via RippleNet to provide one frictionless experience to send money globally. Banks and payment providers can use the digital asset XRP to further reduce their costs and access new markets. XRP is the fastest and most scalable digital asset today.
Don’t forget to share the post if you love it !