Ripple Dumped $250 Million in XRP in Q2 – And 40% Went to Whales
Ripple Labs released its quarterly report this morning. The report focuses on finding legitimate trading volume data and Ripple’s strategy for dumping its XRP hoard moving forward.
Ripple Vows to Drastically Reduce Income from Selling XRP on Open Market
In this nascent industry, we need to be transparent and urge others to do the same. As a responsible stakeholder of XRP, @Ripple is confronting this issue by updating the benchmark for market volume and reducing future sales of XRP. https://t.co/RTuWBBT0Oc
— Brad Garlinghouse (@bgarlinghouse) July 24, 2019
The company reports that it raised over $250 million in the second quarter of 2019 but that it will be selling a lot less of its stash moving forward.
Ripple Labs’ massive vault of XRP, of which it is authorized to sell several billion every month (but rarely, if ever, sells it all), is a frequent source of criticism.
Just over $100 million of the raised funds is credited to “direct institutional sales.” The other $144.6 million came from the crypto unicorn dumping on the market through programmatic sales based on a percentage of global XRP trading volume.
In this report, the firm officially addresses the issue of fake crypto exchange volume, writing:
“Given the reports of inflated volumes, which Ripple took seriously, the company temporarily paused programmatic sales and placed limits on institutional sales to evaluate the problem in early Q2. Ripple later resumed XRP sales at a rate that was 50% lower versus previous guidance, at 10 basis points of CoinMarketCap reported volumes. ”
The logic here is that if volumes are inflated, then the actual percentage of XRP’s overall volume represented by the company’s own sales is significantly higher. By its math, the company contributed either 0.16% or 0.64% of the total volume.
The first figure comes from Coinmarketcap.com.
Ripple Tackles False XRP Trading Volume
The figure that Ripple Labs accepts as more accurate is the latter, being that they have chosen CryptoCompare’s Top Tier (CCTT).
“Top Tier” is a list of exchanges with better ratings. Ripple has opted to only calculate data from these exchanges, which decreases their overall volume by 75% and increases their market participation by 300%.
Moving forward, Ripple will only trust data from CCTT.
“Ripple plans to take a more conservative approach to XRP sales in Q3. As noted, the company switched benchmarks to CCTT and will target programmatic sales at 10 basis points of CCTT reported volumes.”
If they had used the same data in Q2, Ripple would have sold roughly $39 million worth of XRP.
Ripple reports that upon learning of fake exchange volumes, they reduced their sales targets on the open market by 50% based on Coinmarketcap.com. They’ve decided to simply not use the site at all moving forward, as their tools for weeding out bad data do not meet the blockchain startup’s muster.
One XRP was worth about 31 cents or 0.00003249 BTC at press time, according to CCN’s Ripple price index.