About XRP
XRP is the native token of the XRP Ledger, a payment network designed to settle transfers between currencies in seconds. Unlike mined coins, the full XRP supply was created at launch and part of it is released from escrow over time rather than issued by miners.
The XRP supply, and who votes on changes
The name describes the original idea. A payment could pass through several hops and several currencies to reach someone, instead of needing a direct relationship between the two ends. The ledger was built across 2011 and 2012 for that, with the currency acting as the bridge between the others.
The distribution decided at the start still shapes the asset. 100 billion units were created at once, 80 billion going to Ripple, the company that built the ledger, and 20 billion to the founders. In 2017 Ripple locked 55 billion of its holding into escrows on the ledger itself, releasing up to 1 billion a month. The documentation describes the effect precisely: an upper limit on how much new XRP can be brought into circulation, which is not the same as a schedule of what will be. Whatever is not put into circulation in a month goes into a new escrow instead of out. Discretion is bounded, not removed, and a large share of the supply began in very few hands.
Who can change the rules is narrower than it first looks. An amendment has to hold more than 80 per cent support from a server’s trusted validators for two weeks, and if support falls below that the two weeks start again. The word carrying the weight is trusted. Each server operator chooses which validators to trust, so the 80 per cent is measured across that list and not across everyone running a validator.
One mechanism works in the opposite direction. Every transaction destroys a small amount of XRP as its cost, and it is paid to nobody. With use, the total in existence falls slowly and permanently. Accounts also hold a small reserve, which exists to stop the shared ledger filling up with junk entries. That reserve can be spent on transaction costs, though it cannot be sent to anyone else.
Longer read: How XRP supply works: creation, escrow and destruction. All 100 billion XRP were created in one act and none can ever be added. This guide explains who received them, how the escrow releases work on the ledger, and why every transaction removes a small amount from existence.
See more prices on the crypto in AUD hub, and how this figure is struck on the methodology page.