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August 19, 2020 @ 14:52 +03:00
When the XRP community is concerned about the price of XRP, there are often two major issues that are suspected of negatively affecting the price: The sales of Ripple itself and the sales of former architect and co-founder of the XRP Ledger, Jed McCaleb. The current CTO of Stellar Lumens (XLM) was once head of Ripple, but left the company in 2014 due to a disagreement with Chris Larsen, who was also part of the founding team and is now managing director at Ripple.
Of the 100 billion XRP created with the genesis block of the XRP Ledger, 20 billion XRP went to the founders, while the other 80 billion XRP went to Ripple. When Jed McCaleb quit his job, he in turn received 9 billion of the 20 billion XRP as compensation. In order to prevent a dump of the market price of XRP, both sides reached an agreement which was renewed after a break in February 2016.
According to the latter, McCaleb had to donate 2 billion XRP to a charitable fund (“DAF”) of his choice. The remaining XRP will be held in a custodial account. Certain rules were established for this account. The former Ripple co-founder, together with the DAF, is allowed to sell a maximum of 0.5% of the average daily XRP volume on a daily basis. This quota rose to 0.75% in the second and third year, and to 1% in the fourth year. After the fourth year of the agreement, McCaleb and the DAF may sell 1.5% of the average daily XRP volume each day.
McCaleb’s XRP sales reach all-time high
As XRPArcade has now determined, it is clearly apparent that the first four years after the agreement passed in February 2020. After February 2020, McCaleb’s sales have risen significantly, as in the past few months the XRP volume has risen on the one hand, and McCaleb is now allowed to sell 1.5% of the average daily volume on the other.
As the publication further states, it would take more than six more years for McCaleb to sell all its XRP if it continued to sell an average of 1.862 million XRP per day. On the other hand, if he continues to sell 6.180 million XRP per day, his stock could be depleted in less than two years.
The impact of McCaleb’s sales on the XRP price is controversial in the crypto community. Just earlier this year, WhaleAlert published a study according to which McCaleb has sold XRP worth USD 135 million over the past five years at an average price of USD 0.129. The study identified a potential risk to the price stability of XRP.
However, there is not much to see of this at the moment. Despite McCaleb’s sharp increase in sales volume, the XRP price has been making strong gains during the current bull market.
Ex-Ripple founder McCaleb increases XRP sales 13-fold compared to 2019, Crypto News Flash, Aug 19