Distribution
Of the 100 billion created, 20 billion XRP were retained by the creators, who were also the founders of Ripple Labs.
The creators gave the remaining 80% of the total to Ripple Labs, intended to finance operations. Ripple Labs also had a short supply in 2013 of less than 200 million XRP (0.2% of all XRP) through the World Community Grid.
As of November 30, 2012, 7.2 billion XRP from the Ripple Lab amounts were distributed, with part of the amount allocated to charities, such as the Computing for Good initiative, which began offering XRP in exchange for volunteer time on research projects.
As of March 2015, 67% of the original 80% from Ripple Labs was still held by the company, with Ripple Labs stating that
"we are committed to distribution strategies that we expect will result in a stable or strengthening XRP exchange rate against other currencies."
The amount of XRP distributed and its movements can be tracked through the Ripple Charts website.
Pro-XRP software engineer Vincent Van Code analyzed the circulating supply of XRP to reveal how much is actually usable for business applications, such as payments, liquidity provision, and international settlements.
Although XRP has a total supply of 100 billion tokens, its analysis suggests that the often-mentioned number is misleading when it comes to practical liquidity.
Custody and strategic holdings of Ripple restrict circulation
Ripple currently holds about 35.9 billion XRP in custody, releasing 1 billion per month. However, the company often locks back a large portion of this supply. It typically sends back to the deposit about 800 million XRP per month, making most of it unavailable for active use.
In addition to the deposit, Ripple also holds 4.9 billion XRP outside of it for strategic purposes, such as acquisitions and incentives. These tokens are not considered part of the liquid supply accessible to the broader market.
Billions in XRP are lost or inactive
Like Bitcoin, XRP suffers initial losses in wallets. It is estimated that 5 to 8 billion XRP may be permanently inaccessible due to lost keys or abandoned wallets. Additionally, institutional holders, including the founders of Ripple and major early adopters.
Van Code suggested that these large investors collectively hold between 20 and 25 billion XRP. These tokens rarely move and are typically held in a long-term position, further decreasing the liquid supply.
Only 12 to 15 billion XRP may be readily available
Taking all these factors into account, Ripple's deposit, inaccessible tokens, long-term holders, and DeFi commitments, Van Code concludes that only 12 to 15 billion XRP are likely available for immediate commercial use. This represents only 12% to 15% of the total supply of 100 billion.
As use cases such as on-demand liquidity, CBDC settlement, and asset tokenization increase, the demand for XRP utilities may begin to outstrip the available supply. With such limited fluctuation, any significant increase in adoption or institutional use may result in a rapid repricing of the asset as markets adjust to real liquidity constraints.
"The price must rise to meet demand," concluded Van Code.
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