Stellar Foundation Burns 55 Billion XLM Tokens for Increased Efficiency
In a Medium post published on November 5, 2019, the Stellar Development Foundation (SDF) announced the token burn of more than 55 billion XLM worth $4.7 billion. The announcement says the decision to burn XLM tokens is part of a grander plan undertaken by the SDF to make the organization more lean and efficient in structure as it prepares itself to take forward strides in the cryptospace.
The SDF has burned close to 55 billion XLM digital tokens to shave the total circulating supply of the altcoin by almost 50 percent. The dramatic development was announced by Stellar CEO, Denelle Dixon, who was speaking at the Stellar Meridian conference on November 4.
Per sources close to the matter, the SDF stated that it found the number of allocated XLM tokens for the development of the organization’s operating fund and reserve for giveaway programs “too large.” Notably, the two arms of the organization were allocated XLM 17 billion and 68 billion, respectively.
The official announcement reads in part:
“SDF can be leaner and do the work it was created to do using fewer lumens. Over the years we’ve also seen that giveaways and airdrops have diminishing effects, especially in the outsized amounts our original plan was designed to support. So a smaller public-facing program would have just as much impact. The network and community around Stellar are now robust enough to allow SDF to carry less weight, too.”
Now that close to 55 billion XLM tokens have been burned, exactly 50 billion XLM tokens remain in existence. Out of these, close to 30 billion XLM is still administered by the SDF.
What of the Remaining XLM?
With regard to the utility of the remaining XLM tokens, the SDF cleared the air stating that 12 billion XLM will be dedicated to an aggressive program for the Stellar ecosystem’s direct development.
The Foundation also expressed interest in building up human capital to help it stay true to the project’s whitepaper’s roadmap and long-term vision. According to the post, 12 billion Lumens for this allocation have been escrowed with a crypto institute of which three billion XLM will be unlocked every year for the next four years.
XLM Price Spikes About 22 percent
Token burns are usually followed by a steep jump in the market price of the relevant cryptocurrency, and XLM is no different. At press time, XLM sits at 10th position on the CoinMarketCap crypto table with a market cap of about $1.67 billion – trading at $0.083.
On a similar note, BTCManager reported in October 2018 how controversial stablecoin firm Tether had burned more than 500 million USDT.