Stellar (XLM) surged by over 20 percent after the Stellar Development Foundation decided to burn 55 billion of the XLM tokens in the market.
This represents more than half of the cryptocurrency supply considering there were 105 billion XLM in existence.
Stellar Surges After Massive XLM Burn
The Stellar Development Foundation has decided to burn 55 billion XLM reducing the total supply to 50 billion. Despite that, there are still 20 billion XLM in circulation, the same as there were before.
The Stellar project was created by Jed McCaleb, who worked as the CTO of Ripple, a close competitor to Stellar. Now, he decided to send over 50 percent of the tokens to an address without signers.
In a recent blog post, the Stellar Development Foundation (SDF) explained that the goal is to make Stellar the global payment standard. The SDF mentioned that they can do their work by using fewer lumens that the ones that were in the market.
About the supply reduction, the SDF commented:
“So: we’ve decided to reduce our lumen allocations and to rededicate what remains to what we now think Stellar needs most. We’ll use approximate numbers here in the text, but the chart and table to follow detail the precise amounts in question.”
Basically, the SDF wants to restructure its development strategy. The announcement says that they have seen that their giveaways and airdrops they were doing had diminishing effects.
The Stellar Development Foundation has given away many XLM coins through different airdrops.
For example, a few months ago, they decided to airdrop $120 million in XLM tokens to users of Keybase. Last year they also partnered with Blockchain.com to airdrop $125 million in XLM to Blockchain Wallet users.
The SDF informed they burned 5 billion lumens from their operating funds that it now stands at 12 billion lumens. They want to become efficient with the work they do and how they do it.
Furthermore, they are also ending Stellar’s World Giveaway Program and their Partner Giveaway programs. The SDF considers that the number of lumens they hold now aligns better with their mission. They stated they are not going to burn any additional lumens in the future.
In sum, the SDF will now have 11,954,851,083 XLM, the Giveaway Programs will have 6,000,000,000 XLM and partnership programs 12,000,000,000 XLM.
At the time of writing this article, XLM is the 10th largest cryptocurrency in the market with a valuation of $1.63 billion and a price per coin of $0.081.