I know many in this community are eager to learn more about Jed's XRP holdings. I would like to take this opportunity to update you on an agreement reached by the founders. First, it is important to understand how and why XRP was distributed amongst the original founders.
When Chris, Jed and Arthur started the company in 2012, they - with guidance from their professional advisors – determined the best way to launch their idea was to personally create 100 billion XRP and then gift the majority of it to Ripple Labs. As part of their compensation for assuming the risks associated with starting a company in an emerging and fast-evolving industry, they retained 20 billion XRP, which they divided amongst themselves. This was done with the full knowledge of investors and partners.
As the industry and Ripple evolved, it became apparent that there existed an opportunity to change the distribution of the founders' XRP in a way that's productive for the market and stakeholders like you. Over the course of this past year, Ripple Labs has worked diligently to resolve this issue amongst the three founders in a constructive way.
As you know, Chris has agreed to gift 7 billion XRP to an independent foundation committed to the financially underserved. That XRP has been locked up and will be donated to the foundation over time. The foundation - the Ripple Foundation for Financial Innovation - has been established and its charter is to help the underbanked worldwide in a way that's supportive to the Ripple ecosystem and the value of XRP. An official announcement from the foundation is forthcoming.
Arthur committed to a lock-up period for his XRP months ago. Ripple Labs is working on a broader XRP lock-up policy for team members, so his lock-up will be part of that plan.
Following Jed's stated intention to sell his XRP, Ripple Labs reengaged Jed to ensure responsible distribution of his XRP stake in a way that helps grow the Ripple ecosystem. After extensive discussions, Jed has agreed to lock-up terms for his XRP. By the terms, he cannot sell more than:
$10,000 per week during the first year
$20,000 per week during the second, third and fourth years
750 million XRP per year for the fifth and sixth years
1 billion XRP per year for the seventh year
2 billion XRP per year after the seventh year
For context, $10,000 per week currently comprises less than one percent of volume, so it'd have a minimal impact to the price of XRP. For the next four weeks, he retains an option to sell up to $2.5 million of XRP off market to a single counterparty vetted by Ripple Labs.
As you know, Chris and Jed hold very different viewpoints on how Ripple will re-architect finance for the betterment of the world. But it’s also important to acknowledge that they both share the ultimate desire to see that change realized. Our team at Ripple Labs, our partners, investors and I'm sure you, our community, are pleased to have reached a final, constructive outcome as we continue on with the important work we care about and believe in so deeply.