Thread by @SpencerApplebau

1/ As a follow-up to @MessariCrypto's work, I had some fun digging into XRP II, LLC (Ripple's licensed MSB). The company sold $61.93M of XRP to inst'l buyers and $107.49M programmatically on exchange in Q1 2019. This is the publicly viewable XRP II address bithomp.com/explorer/xrpII

2/ My reasoning for a thread is to open a discussion on XRP II, LLC's inst'l sales. Many in the XRP community note that XRP II is not directly sending all of its funds to exchange. However, that doesn't paint the whole picture. A lot of the XRP ends up on exchange *indirectly*

3/ With that being said, it may be Ripple's counterparties shielding their holdings by funneling XRP through exchanges. That said, without disclosures on lockups / discounts, we can't say that for sure. Like it or not, a majority of the XRP routes to various exchange wallets

4/ Interestingly, from Q4 2016 - Q4 2017, Ripple included language in 5 market reports like this: "they include sales restrictions that help mitigate the risk of market instability due to large subsequent sales" This tells me there were likely counterparty lockups on inst'l deals

5/ For an undisclosed reason, Ripple removed this language in subsequent XRP Market Reports. From Q1 2018 to Q1 2019 (5 reports), there has been zero wording that implies any lockups for inst'l buyers. Does anyone have insight as to why the transparency report language changed?

6/ In Dec 2017, Ripple escrowed 55 Billion XRP, or 55% of the supply, in an attempt to provide predictability to XRP's supply. Each month, 1B XRP are released from escrow to be used at Ripple's discretion. They return most of the XRP to escrow after selling and/or giving it away

7/ Each quarter, they sell a large amount of XRP directly to financial institutions & programmatically on various crypto exchanges (presumably to retail). In total, XRP II, LLC has sold ~$889M of XRP in 2.5 years. A summary of their XRP sales in $ terms can be found in the chart:

8/ To get a sense for XRP's genesis distribution, look no further than @BitMEXResearch's piece The Ripple Story. 80 billion XRP allocated to the company (now Ripple Inc.) + 20 billion XRP were reserved for founders Chris Larsen (9.5B), Jed McCaleb (9.5B), and Arthur Britto (1B)

9/ With that backdrop, let's look at Q1 2019 activity

The 1st outgoing tx from XRP II, LLC in Q1 was on Jan 1, 2019 for 10M XRP.

All 10M XRP went through an intermediary address - rfuQJ1VKCPfDUHEEV9Z1G2aKrRDXguBG5A. 6M then ended up at Bittrex & 4M ended up at Coinbase Pro

10/ The second outgoing tx was on Jan 2 for 18.69M XRP. On Jan 4, the intermediary address sent 4M of the 18.69M XRP to rpdcoYAVfkxUpKsHQ96LtTRYRi8L3aWndK.

4 mins later, 279K of the 4m was sent to Bithumb. 6 mins after that, 3.75M XRP was sent to Bitstamp = 4M sent to exchange

11/ On Jan 6, more of the same happened (this time 3M sent to Bitstamp). On Jan 7 the intermediary address received 2M XRP from Ripple and 3M XRP was sent to Bitstamp the next day. On Jan 9, more of the same. Eventually, the address sent 2M directly w/o using an intermediary

12/ The 3rd tx from XRP II was on Jan 2. 8.92M XRP was sent to intermediary address r4LxjoDoQ2AHZ2Uj1Lvu1WwYhPZcfNbVWT

On Mar. 14 + 15, 450k XRP were sent to Binance. On Mar. 19, 9.55M XRP were sent to rEPndLwMotKmupw8qLNLaj9i6nRWchU6ng. Screenshot shows what happened after that

13/ The 4th meaningful tx from XRP II occurred on Jan 11. ~10M XRP was sent to rKSsfyqxdxd6nPJVqPBxPBqrM5RHgarrd8. From Jan 16 to Feb 13, all 10M XRP were sent to rMjjMBDVwWdRsbC4QaU98MXQgSGFVv2G1c

I've attached some screenshots to shed light on where the 10M xrp went:

14/ The 5th tx from XRP II came on Jan 18. The company sent 30M XRP to r9x4D7c2nfa3UJefLR4fpN31zZQvByHSLQ

From Jan 25 to Feb 8, 28M of the 30M XRP were sent to rEFtdHuyxgUjDL4t3gBsesQwHtnDy2W8rC then to rHtqTcp3SvjxbhpTYMFTUWX5B1mny9KWeE

A lot of that XRP gets sent to Bitstamp:

15/ The 6th meaningful tx from XRP II, LLC was sent on Jan 29. It was sent to raWHtZNEtpMmjYEmEYswbkerDREw87qjPu. It has remained there and has not been sent to exchange yet

16/ The 7th tx came on Feb 4, and 18.99M XRP was sent to rz1dS6wb8YmU1P3P39nV2SCpMb7ZAiZVm.

10M XRP is then routed through rn46qccnmP3H2r5kA4eY7uwf5UTW5FP2Dn + rpDcoYAVfkxUpKsHQ96LtTRYRi8L3aWndK and ends up on Bitstamp 13 mins after it hits the intermediary address:

17/ The 8th outgoing transaction from XRP II, LLC came on Feb 6. 3M XRP is sent to rsfGiJsdP2BXnBinxciD6rb318zwamJhzE.

In the days following the transfer, the XRP is sent to various exchange wallets including Binance, Bittrex and Coinbase Pro. Here are some transaction examples:

18/ Transaction #9 happened on Feb 8. 30M XRP was sent to r9x4D7c2nfa3UJefLR4fpN31zZQvByHSLQ.

Beginning Feb 12, 28M XRP gets routed through rEFtdHuyxgUjDL4t3gBsesQwHtnDy2W8rC and ends up at rHtqTcp3SvjxbhpTYMFTUWX5B1mny9KWeE.

Per tx #5 from above, we know how this story ends:

19/ The 10th transaction, totaling 10M XRP, came on Feb 14. It is routed through rKSsfyqxdxd6nPJVqPBxPBqrM5RHgarrd8 and arrives at rMjjMBDVwWdRsbC4QaU98MXQgSGFVv2G1c.

5M XRP ends up at Binance, 2.5M ends up at Kraken, and 2.5M ends up at Poloniex:

20/ These are some examples of txs that XRP II, LLC sends out (sorted in chronological order). I stopped on Feb 14 because I'm running out of tweets, but feel free to track the transactions yourself: xrpscan.com/account/r9B3os…

If there's sufficient interest, I can do the rest

21/ In total, XRP II, LLC (Ripple's MSB) has sold ~$305M directly to institutions in private deals over the past 2.5 years (~34% of its total XRP sales). Other than vague language in early Quarterly XRP Markets Reports, we have no insight into the terms of these closed-door deals

22/ Not only do we not know the lockups for inst'l sales, we don't know the price discounts or the amount of XRP sold (they only disclose XRP released from escrow). I'm hoping this thread can unlock a dialogue around the selling pressure coming from Ripple, Inc's escrowed coins.

23/ I'm not claiming to know which txs these are (who's selling the XRP, is this address only programmatic sales, etc?). My broader point is that we have zero insight into the inst'l private sale terms, and thus don't know how many XRP are entering the liquid supply each quarter.

23/ There has been some tremendous work done in this area by the @MessariCrypto team (@twobitidiot @benhoneill & crew), and I expect this analysis will only improve as the industry matures. I look forward to your thoughts on improving crypto transparency! messari.substack.com/p/circulating-…

25/ Please let me know if you find any errors or have any suggestions to improve this thread, I'd be happy to update it!

Sources: Quarterly XRP Markets Reports, CoinMarketCap, Bithomp, Wipple - XRP Intelligence, Bitmex Research, XRP Scan, Ripple Insights, Messari