Ripple competitor Stellar Lumens burns 55 billion XLM

  • The Stellar Lumens Foundation announced tonight that it has burned more than 55 billion XLM.
  • The price of XLM has reacted accordingly and has risen more than 15% overnight.

Ripple burns a certain number of the native token, XRP, every month to protect the token from decay. Other prominent examples include Binance’s quarterly Coinburn. In this way, the exchange (Binance) wants to return part of its profit to the community, even though the BNB price has not reacted very strongly to this in the past.

Stellar Lumens burns 55 billion XLM overnight

At the Inaugural Conference in Meixko City tonight it was decided that the Stellar Lumens Foundation (SDF) will burn 55 billion XLM. This represents a nominal equivalent of nearly $4.5 billion that was destroyed at 00:05 tonight. The founder of Satoshipay announced this on Twitter.

As a result of the announcement, the price of Stellar Lumens has temporarily risen above 25% to a price of USD 0.08. Stellar Lumens thus recorded the largest price increase within 50 largest cryptocurrencies (measured by market capitalization) worldwide.

This Coinburn could lead to the assumption that the circulating quantity of XLM in circulation has decreased by 55 billion XLM. This could explain why the price has shot up so quickly as the crypto currency market is regulated by supply and demand. On closer inspection, however, it is noticeable that the circulating quantity has not changed. This is also confirmed by Bitcoin Trader Josh Rager.

Stellar Lumens 2.0 with new targets

Stellar Lumens announces in a blog post that the maximum supply of 105 billion XLM was too much and the foundation wants to streamline the entire company. The Lumens (Stellar Lumens native token) was sent to a Stellar account without a signer, so no one could access it. The foundation states that the new token distribution is better suited to its new goals:

We believe the number of lumens now aligns better with our mission. SDF will not burn any additional lumens.

As of today, there are now 50 billion Lumens, as out of 105 billion a total of 55 billion were burned tonight. The following graphic shows the token distribution and its actual use in practice:

stellar-development-remaining-lumens

Source: https://www.stellar.org/blog/sdfs-next-steps/

The Stellar Foundation still controls 30 billion XLM, more than 60% of the available XLM. The remaining 12 billion XLM from SDF’s operational fund will be used for the direct development and promotion of Stellar. Currently, the Stellar Lumens Foundation has only 5 employees, but this number is expected to double by the end of next year.

1 billion XLM will flow into the infrastructure to further explore and expand Stellar-based apps and other payment network interfaces. Another billion XLM will be used to finance the Infrastructure Grant Program. This is intended to address projects that provide decisive added value for the Stellar Network and are also to be expanded.

2 billion XLM are to flow into various marketing areas such as PR and communication, although these values are not to be regarded as fixed, but can be used flexibly. SDF has great visions and must hold its own against the competition, such as Ripple. It remains to be seen whether the project can hold its own on the cryptocurrency market in the long term.

The following video shows Denelle Dixon, CEO of the Stellar Lumens Foundation, talking about Stellar’s next goals and visions:

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Collin Brown

Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.

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