Stellar has burned a whopping 55 billion XLM tokens, almost 50% of the total supply, in line with an updated vision for the project. Announced ahead of Stellar Meridian, Stellar’s first ever conference which is being held in Mexico City, Mexico, the news brought a 21% jump in the token price but had no effect on the current market cap.
Tokens Taken From Giveaway Funds
In a blog post explaining the decision, the Stellar Development Foundation (SDF) stated that 5 billion tokens were burned from the operating fund, leaving 12 billion still in existence, assuring investors that the reduction “isn’t in any way a retreat from our mission”, but is instead an “acknowledgement that we owe it to the ecosystem, to the network, and to ourselves, to be as efficient as possible in our work.” SDF also announced the dissolution of the World Giveaway and the Partner Giveaway programs, both of which were created at the network’s inception but no longer feature in the company’s future, freeing up 68 billion XLM tokens. 50 billion of these will be burned, leaving a number of tokens that “now aligns better with our mission”, while SDF also confirmed that no more token burns will take place. The burn will not affect the market cap of the token as all the burned tokens were not in circulation.
Token Burn Gets Muted Reaction
While the news was greeted with joy by some token holders, others were more circumspect of SDF’s decision, claiming that it was a stunt to create FOMO around the token:
Also $XLM burn is classic shitcoin tactics.
You premine a lot beforehand. Burn tokens you were already going to burn and enjoy the hype/fomo/pump event.
Just don’t get most in the memes.
— Akado ‘Bitcoin Halving in 185 days’ Sang (@AkadoSang) November 5, 2019
Others claimed that the token burn only serves to highlight the influence that a single entity still has over the coin:
I’ll be the one to point out that the fact that XLM is only up 20% on the news (instead of 100%) that 50% of supply is being burned is solid evidence against the “burns are deflationary” thesis https://t.co/MpRBDbT8LL
— nic carter (@nic__carter) November 5, 2019
News of the token burn comes five months after Stellar secretly patched a bug in their code that inflated the total supply by 2.5 billion, handily allowing them to get rid of the extra tokens while buying them some nice headlines at the same time. Stellar has generally enjoyed a good 2019, with Wirex using the platform to launch a number of stablecoins and the XLM token being added to Coinbase.