Ripple Labs has published its third quarter report. In addition to numerous advances in development and adoption, two bits of information are particularly interesting for XRP investors.
The first figure was hailed a major milestone by Ripple Labs CEO Brad Garlinghouse on Twitter. For the first time in the history, the company’s XRP holdings have fallen below the circulating supply figure of currently 50.09 billion XRP. Garlinghouse tweeted:
Below 50% – a huge milestone! For 10 years, Ripple has focused on using XRP & the XRPL within our products for its speed, security and scalability for movement of value. As more customers use XRP in their payments flows, it’s clear there is real utility here.
The company has faced recurring criticism in the past for maintaining centralized control over the XRP Ledger and the value of the XRP token. A key argument here has always been that the company controls more than half of the total XRP token supply.
In addition, the monthly issuance from escrow and the sale of XRP into the primary and secondary markets have also been the focus of critics. In its Q3 report, the company rejects this criticism once again and referred to the consensus mechanism of the XRPL:
Critics have pointed to the company’s XRP ownership as an indicator that the XRP Ledger is controlled by Ripple. This is not true. The XRP Ledger (XRPL) uses Federated Byzantine Consensus to validate transactions, add new features and secure the network, which means that each validator node gets one vote regardless of how much XRP they own.
Ripple currently operates only 4 of over 130 validation nodes on the XRPL, marking a dramatic drop from a few years prior.
Ripple Buying XRP On The Secondary Market
The second key takeaway for XRP investors is the confirmation that Ripple is continuing to buy back XRP on the secondary market. The bought-back XRP are to be sold to On Demand Liquidity (ODL) companies, meaning that the XRP based remittance solution is still seeing a growing demand.
Ripple reported that On Demand Liquidity went live in Brazil, a key market in LATAM. The company partnered with Travelex, which will initially allow transactions between Brazil and Mexico. In addition, FOMO Pay (Singapore) and iRemit (Philippines) announced their use of ODL for treasury flows.
Total XRP sales, net of purchases, amounted to $310.68 million, down from $408.90 million in the previous quarter.
In this regard, the report also notes that XRP continues to be sold only in conjunction with ODL transactions and are not conducted as programmatic sales, which were halted in Q4 2019 as a result of loud criticism. ODL volumes have increased with the global expansion.
Ripple has been a buyer of XRP in the secondary market and expects to continue to undertake purchases as ODL continues to gain global momentum. Total sales by Ripple, net of purchases, ended the quarter at 0.42% of global XRP volume.
While the crypto market is currently pausing its uptrend, XRP manages to stay above the 200-day moving average.