Of the total 100 billion XRP tokens created, 20% were allocated to Ripple's three founders and Ripple received the other 80 billion tokens. One of the co-founders, Jed McCaleb, left the company in June 2013 to establish a competing cryptocurrency called Stellar. Over the years, Jed sold all of his 9 billion XRP tokens in accordance with an agreement he had with Ripple. The agreement ensured that the liquidation of his tokens was based on XRP's daily trading volume, minimizing its impact on the token's price.
On December 7, 2017, Ripple locked 55 billion XRP tokens into a series of escrows. These escrows release 1 billion XRP each month to Ripple, the company. This measure was implemented to provide predictability to the XRP token supply and gradually increase the circulating supply while maintaining and enhancing liquidity. However this is one very controversial aspect to the XRP token as it has been made clear to the market that Ripple sell a lot of XRP to fund their company which obviously causes XRP’s price to fall and be suppressed each time they choose to do so.
XRP also has a slightly deflationary nature. To prevent spam attacks, every transaction incurs a small transaction cost, which is then burned. The transaction cost varies depending on the transaction's load on the system or its type. However, these costs are generally insignificant, as typical payments require only fractions of a penny or around 0.0003 XRP. Projections indicate that it would take up to 70,000 years before the XRP supply is exhausted. It's important to note that the ledger can be amended to adjust transaction costs at any time if so desired.
These tokenomics of XRP highlight its centralized aspects very clearly. The fact that Ripple pre-minted all their tokens could have potentially led to a significant price crash it may never have recovered from if one of its founders, Jed, who had a falling out with the Ripple team, had dumped his holdings from the beginning, showing the associated risks of conducting a pre-mind token. The ability to modify the token's supply schedule and transaction costs does provide flexibility within the assets tokenomics to ensure an appropriate market supply. However once again this highlights the centralized nature of the XRP token. If the Ripple team were to make further changes to the tokenomics schedule, they could potentially introduce a model that allows for the sale of even more XRP to the market. In my opinion, this model created by Ripple does not offer any real benefits to its long term investors. Show Less
