Any massive movement of cryptocurrency could easily trigger a negative reaction in the market. Policies surrounding massive sellouts or buyouts are usually put in place to protect the value of digital currencies in the exchange market. Ripple Labs recently reached an agreement to prevent any massive movements of the XRP initiated by its original co-founder, Jed McCaleb. McCaleb has received about 9 Billion XRP as a reward for founding the company.

Safeguarding Interests

McCaleb recently launched his new project, Stellar, and it is likely that he may want to liquidate his assets to fund it. This is only logical. However, Ripple has also to safeguard its interests. Ripple came up with a distribution timeline which McCaleb agreed to. This agreement allows McCaleb to liquidate his assets over a period of seven years without negatively affecting the value of XRP.

Under the agreement, McCaleb is barred from selling more than $10,000 worth of XRP in a week during the first year that the deal takes effect. The effect of selling XRP worth $10,000 in one week would only compromise less than 1% of the total XRP volume, therefore, safeguarding the value of XRP on the exchange market.

Further Agreement Details

According to Coindesk, the restriction on XRP worth $10,000 per week will only be in effect for the first year of the agreement. The subsequent years have different limits. For the second, third and fourth years of the agreement, McCaleb can liquidate up to $20,000 a week. A maximum value of $750,000,000 worth of XRP is the limit of XRP McCaleb can sell in the fifth and sixth year of the agreement. For the seventh year, McCaleb is limited to $1 billion worth of XRP. Each subsequent year after the seventh year limits McCaleb to $2 billion worth of XRP.

This agreement, therefore, safeguards the interests of both parties, keeping the value of XRP safe while allowing McCaleb to liquidate a significant amount of his assets yearly.

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