XLM prices are skyrocketing after a group named the Stellar Development Foundation (SDF) burned a whopping 55 billion tokens – effectively destroying over half of the Stellar Lumens tokens in existence.
The SDF made its announcement in a blog post, leading to a 24-hour price surge of over 20%.
At pixel time (06:10 UTC), XLM trades at c. USD 0.081 and is up by 19% in the past 24 hours and by 24% in the past week.
XLM price chart:
The foundation, which was established in 2014, describes itself as a non-profit organization that “supports the development and growth of the Stellar network” and aims to make Stellar "the global payments standard."
The SDF burned the tokens – worth some USD 4 billion at the time of sale – by sending them to an account with no signers.
"Stellar isn’t mined, so the lumens now in public hands are there because we’ve worked hard to get them there over the last four years. As for the other two allocations, in time and after a lot of thought, we’ve come to realize they’re too large. SDF can be leaner and do the work it was created to do using fewer lumens," they said, adding that giveaways and airdrops have diminishing effects.
"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--we’re just a piece of a much larger whole, and the funds we steward should reflect that," the SDF explained why they decided to reduce their lumen allocations.
The Foundation is also ending Stellar’s World Giveaway Program (for individual airdrops) and their Partner Giveaway programs. (Learn more: Stellar’s Free XLM Either Unclaimed or Exchanged for Other Coins)
Although the burn saw the SDF do away with the vast majority of its tokens, it still has some 30 billion XLM tokens, which it will make use of for its operations, giveaways and partnerships. The Foundation said they will not burn any additional lumens.
Account details can be found here.
Big Stellar movements were also confirmed by Bitcoin and major altcoin tracking service Whale Alert.
# # # # # # 999,999,990 #XLM (69,802,723 USD) transferred from SDF Partnership Program to unknown wallet— Whale Alert (@whale_alert)
The move comes just days after a rally pushed the token back into the top 10 tokens by market capitalization. The token was also listed by the Japanese crypto exchange Coincheck on Friday last week.
The crypto universe was not short of opinions on the matter, with many taking to Twitter to express their opinions.
"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," said Nic Carter, co-founder of crypto market analysis firm Coin Metrics.
"Let's destroy half the supply and generate some buzz. Better own 30 billion tokens worth something, than 85 billion worth nothing," added trader Alex Krüger.
@Josh_Rager I thought the same thing. I think it gives people more confidence in the future that there wont be a ma… https://t.co/aYpDRq9p0d— Nathan Witvoet (@Nathan_Witvoet)
If you read this and think:— Luke Martin (@VentureCoinist)
@CryptoK35931496 To be fair, that's the kind of news I buy at market without hesitation if I catch it relatively so… https://t.co/h2YZpYk8pA— Alex Krüger (@krugermacro)
Learn more: Why is Binance Really Burning its Own Stash of BNB Tokens?