XLM Jumps 34% in Value After Stellar Foundation Burns Over Half (55 Billion) of the Supply
The Stellar Foundation (SDF) has burned 55 billion of the Stellar Lumens (XLM) tokens, more than half of the cryptocurrency supply, announced CEO Denelle Dixon at the Stellar Meridian conference on Monday.
Before this burn, there had been 105 billion Stellar Lumens in existence, with 20 billion in circulation, 17 billion in SDF’s operating fund, and 68 billion earmarked for giveaway programs administered by SDF.
But the supply of the pre-mined cryptocurrency has now shrunk to just 50 billion.
The reason behind this, according to the announcement made by the Foundation on Nov. 5 is that SDF can “do the work” with “fewer lumens.” Also, it says the giveaways and airdrops have been having diminishing effects and a smaller public-facing program would have just as much impact.
The organization is also ending Stellar’s World Giveaway Program and Partner Gateway Program, as such 50 billion of the 68 billion XLM in those programs were among the burned.
Focus on Development & Adoption of the Network
The foundation will now focus on development with the remaining 12 billion in the operating fund to be dedicated to an “aggressive program” of direct development and advocacy for Stellar.
2 billion of the XLM left from the partnership program will be dedicated to ecosystem support.
In the “Infrastructure grants & indie dev support,” 1 billion will go to grant program supporting projects that provide crucial network utility, and 1 billion to currency support as apps built on Stellar need reliable currency interfaces.
10 billion from the partnership allocation will go to identifying and fostering sustainable Stellar use-cases.
Funds are further used for new products (8 billion XLM), Stellar Enterprise Fund (8 billion XLM) to acquire or invest in businesses, user acquisition (6 billion XLM) to drive awareness and adoption, marketing support (2 billion XLM), and in-app distributions (4 billion XLM).
To burn the lumens, the Foundation has sent them to a Stellar account with no signers.
“We believe the number of lumens now aligns better with our mission. SDF will not burn any additional lumens.”
Last month, Sellar Foundation successfully updated its protocol v12 that removed its inflation features as it is no longer useful for network participants.
Up 34% But Still Down 90%
This cut in supply has the price of XLM flying. From $0.067, the lowest point of yesterday, XLM price surged to $0.090, today’s highest point, seeing a jump of 34.3%.
This spike has the digital asset back among the top ten (at 10th spot).
In late Sept. a similar bout of surge (30%) was seen in XLM price following Stellar Foundation’s announcement to airdrop about 2 billion XLM to the users of slack competitor Keybase.
However, it is still down 66.48% in the past year in the USD market and by 76.8% in the BTC market. Also, XLM is down 90.72% from its all-time high of $0.875.
At the time of writing, XLM has been trading at $0.0814, as per Coincodex.