From the stage of the Stellar Meridian conference, CEO Denelle Dixon announced that the Stellar Development Foundation has burned 55 Billion of its tokens, over half the cryptocurrency’s supply; a move the Stellar community has labelled massive manipulation for positive effect.
With only 105 Billion XLM in existence and 20 Billion in circulation, this burn significantly shrunk the token supply to about 50 Billion. The Stellar team explained that it was hard to get XLM that was held in the market without affecting the token, so they decided that it was better to project how much it could actually use over a ten-year period and calibrate to that number.
“To derive a plan from an arbitrary number serves no purpose,” Dixon added.
The news was welcomed by the community, including HODLers and traders who are accumulating XLM in their portfolio. One participant in the conference stood up and asked everyone to give Dixon a round of applause, which they did.
In the hour following the announcement, XLM’s price jumped about 14% to $0.08.
The Foundation now controls 30 Billion XLM, divided into several buckets. Here’s the breakdown:
- 12 Billion XLM in the direct development fund to support the organization.
- “Ecosystem support” has 2 Billion XLM remaining.
- 10 Billion XLM set aside for investments.
- 6 Billion XLM portioned for user acquisition
- 2 Billion for marketing Stellar
- 4 Billion for in-app promotions
The supply of XLM is fixed now because the community of token holders voted to discontinue inflation.
At a current price of $0.085 per token, the value of the burned tokens is nearly $4.7 Billion.
The development organization said that it will pour 12 Billion of the remaining tokens into “an aggressive program of direct development and advocacy for Stellar.” Additional sums of tokens will be distributed to use-case investment, currency support, new products, the Stellar Enterprise Fund and other applications.
XLM vs XRP
The timing of the Stellar Lumen token burn is timely considering that the Ripple Swell event is about to kick off later this week. And why not? They are competing for investors, adoption, and global dominance in the banking and remittance fields.
Lately, there have been reports that Ripple has recently been dumping tokens into the market. This has angered many investors and community members enough that they have petitioned for a hard fork. Despite the angst of market manipulation, XRP started to move and the price has climbed 4.5% topping out at $0.305 at the time of this report. Lumens are up over 18% and currently trading at 0.081625.
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