Ripple Labs and XRP II LLC have reached an agreement with the R3 blockchain after a long and stretched out lawsuit across the past year over 5 billion token of XRP (worth around $0.0085 each). The idea of such a huge sum of XRP was offered to R3 at such a massive discount shows the centralised nature of the business.
Ripple Labs and XRP II have apparently gone into an agreement with R3 to sell up to 5 billion XRP by the end of next year.
XRP is a digital currency for cross-border payments which makes it a good fit for finance and commerce platforms whereas R3 spearheads 200 distributed ledger technology research companies and blockchain firms, they specifically look into the use of such technology for finance and commerce.
Ripple went into this agreement in order to sell 5 billion XRP tokens for only $42.5 million when the price was closer to that area. Digital currency prices rallied on a big scale and by September last the deal didn’t make any sense.
It would be a huge loss for the XRP market for this deal to go through as it was originally agreed so it made logical sense for them to try and opt out of the deal. Currently, there are around 40 billion tokens of XRP in circulation and the injection of 5 billion more XRP could lead to a huge price crash. However, it is unknown if the lawsuit settlement involved a big amount of cut-rate XRP going into circulation.
The whole ordeal focuses on the nature of XRP. Despite there being almost 40 billion XRP tokens in circulation, there is more than 60 billion XRP which is under control of Ripple Labs and the Ripple Foundation which are not in circulation. This means that Ripple entities could push all of the tokens on the market at any time and run with the money making it very dangerous for traders.