2019-5-18 08:42 |
Blockchain analysis and data firm, Coin metrics, has published a report that claims Ripple’s reports on their escrow service for XRP should probably be taken with a pinch of salt. This is because it found a few significant inconsistencies between the actual information found on the XRP ledger and what Ripple reports as the specifics of their escrow service.
Analysis of XRP Escrow ServiceAccording to the report titled, “An on-chain analysis of Ripple’s escrow system” published on the 16th of May, Ripple has not been transparent about the actual amount of XRP released from escrow. The report says:
“Two quarterly market reports under-reported the number of XRP released from escrow by a total of 200 million XRP ($84 million at current prices).”
The report also claims that:
“The ‘escrow queue’ is implemented differently than announced, leading to a faster future release of escrowed funds compared to the announced schedule.”
Another inconsistency highlighted by the report states that a different an unknown escrow account controlled by an entity(ies) that may be connected with Ripple also released 55 million XRPs.
Ripple’s Escrow ServiceIn March 2017, Ripple officially launched its escrow service which allows funds to be held for a stipulated amount of time until other certain stipulated conditions are met. This could either be until an important date the funds are to be used is reached or just until a certain service is carried out.
According to the official Ripple announcement at the time, the Escrow is advantageous because no intermediaries are required and no single entity is tasked with keeping the funds until set maturity.
Normally, 1 billion XRP is released from escrow and given to Ripple to facilitate trades with institutional investors and also to support Ripple’s xRapid platform. Unused XRP is expected to be returned to escrow and takes the last position, behind any previously returned funds.
This “queueing” process, according to the report, is not done as Ripple has said, leading to a “faster future release” of the XRP.
Coin Metrics explained this saying
“It seems that instead of locking unused funds into the first slot (i.e., the first month) with no existing escrow, they were locked in such a way to maintain the fixed amount of 1 billion XRP in escrow per month.”
Coin Metrics stated in the report that efforts to reach Ripple to explain the inconsistencies discovered have not been fruitful as Ripple is yet to respond.
The post Something is Wrong With Ripple’s XRP Escrow Reporting appeared first on ZyCrypto.
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