Hayden Adams, the creator of the decentralized protocol Uniswap, made a dramatic move on October 20 by burning 99% of the HayCoin (HAY) supply, a token he created five years ago for testing purposes. Adams took to social media platform X (formerly Twitter) to announce the burning of approximately $650 billion worth of HAY tokens, a decision fueled by his discomfort with the speculative trading that surrounded the cryptocurrency.
HayCoin was created prior to Uniswap’s inception as a testing mechanism. Although it held minimal significance, Adams retained over 99.9% of the tokens. The recent unexpected surge in speculative trading prompted a reconsideration of HayCoin’s existence. People were buying and selling it in significant amounts, treating it akin to a memecoin.
In his announcement, Adams expressed unease at owning nearly the entire supply of a token that had become an object of speculative trading and memes. His discomfort extended to having his profile picture associated with HayCoin, prompting the decision to burn his entire wallet holdings, thereby removing the tokens from circulation permanently.
This move has elicited mixed reactions from the online community. While token burning typically leads to a price increase due to the reduction in available supply—a notion supported by HayCoin’s 235% surge within 24 hours, according to CoinGecko—there were broader implications to consider.
Some pointed out potential tax liabilities resulting from the burning, citing a possible ~$128 billion long-term capital gains liability assuming a zero cost basis. Others posited alternative actions Adams could have taken, such as selling the tokens and using the profits for philanthropic efforts.
Adams’ unexpected move underscores the erratic and unpredictable nature of the cryptocurrency landscape, where tokens intended for testing can inadvertently morph into objects of speculative trading, prompting ethical and practical considerations for their creators. This incident also highlights the broader conversations about the responsibilities and ethical obligations of token creators in the dynamic and often unpredictable world of digital currencies.
