Circulating Supply Study for XRP

Executive Summary

In January, we have found material discrepancies between what Ripple reported as “distributed supply” of XRP, and what can be fairly considered “circulating supply” a metric we define as liquid supply (no contractual or programmatic restrictions) that is held outside of the company, affiliates, and creators and/or founders of a given cryptoasset. This report is a confirmation of many of our January findings.

Key Findings:

1. Ripple’s quarterly Transparency Reports and the Ripple Data API rely upon inconsistent and vague methodologies. They may mislead investors because key information regarding sales and and estimated trading volumes significantly understate the pace of selling pressure from Ripple and its founders and affiliates. We find that XRP’s circulating supply inflated by 11.5% in the past six months vs. the 4.5% implied by its API.
2. Quarterly XRP sales as a percentage of global trading volume may be significantly understated due to Ripple’s inclusion of fake volumes from exchanges known to facilitate extensive wash trading or fee-less trading. As a result, we have closely followed Ripple’s preferred exchanges for asset liquidation, and note that many of these exchanges have been excluded from Ripple’s own data API. The company appears to rely on CoinMarketCap’s headline volumes figure rather than the volumes from the exchanges upon which it currently trades.
3. Circulating supply data on Messari will soon be made available for all major assets. In the interim period, we have not changed our liquid supply assumptions for XRP.
4. We’ve been working closely with major indices as well as passive funds to provide them with more accurate data on supply & trading volumes. We recommend others review this report and reach out to us with questions regarding our methodology.