- The Stellar Development Foundation (SDF) has published a mandate for funding the XLM ecosystem for the next 10 years.
- The majority of the approximately 30 billion XLM still owned by the foundation will be used for the further development of the project and use-case investments.
The Stellar Development Foundation (SDF), which is responsible for developing the code base and promoting the XLM ecosystem, has published a mandate for the funding of the project over the next 10 years. For the approximately 30 billion Stellar Lumen (XLM), approximately $1.3 billion, that the SDF currently holds, it has presented a detailed plan to make Stellar the global payment standard.
The Stellar Development Foundation had already announced the mandate on November 5, 2019. However, the current publication cites precise figures and shows that the SDF has actually provided the funds. As of 20 December, 3 billion XLM has already released the funds for 2020 and 9 billion XLM have been transferred to three escrow accounts. The plan is to release 3 billion XLM each year until 2023. The remaining 18 billion XLM will be distributed over the next ten years.
The funding plan for Stellar
The SDF’s main task is to promote the policy around Stellar and the blockchain in general by engaging with regulators and policy makers. The SDF is also dedicated to bringing Stellar technology to new markets and supporting the business ecosystem.
A total of 12 billion XLM will therefore be spent on policy efforts, business relations, ecosystem promotion and technical development (salaries, operating costs). To fund these efforts, SDF sells its XLM through “public exchanges such as Kraken and Coinbase and occasionally through OTC markets”, so that some of the Foundation’s funds go into the circulating supply.
A further 10 billion XLM is to be allocated for use case investments, with 8 billion XLM transferred to an escrow account of the Stellar Enterprise Fund and 2 billion XLM allocated for new products. The Stellar Enterprise Fund will be a venture-style fund for network expansion. The money will be used to acquire or invest in companies that have potential for the Stellar ecosystem.
Separately, 2 billion XLM has been allocated to support the Stellar ecosystem. This includes grants for independent projects, developer events and token emissions on Stellar. The grants are paid quarterly. Before each payment, the SDF reviews the roadmaps with each project. Grants for December 1, 2019 have been paid out to 13 projects, including Blockdaemon, Lobstr, Stellar.expert, Stellarguard, Stellarport and StellarX.
Finally, SDF has reserved 6 billion XLM for user acquisition. The funds will be spent on marketing campaigns and airdrops.
In early November, the Stellar Development Foundation had decided to drastically reduce its own reserves by “burning” 55 billion XLM (out of 85 billion XLM owned by the foundation). As a result, half of Stellar’s total supply was destroyed. The decision was made to increase the value of each XLM token.
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The price of Stellar Lumens (XLM) has shown a slight upward trend (+2%) over the past 24 hours and is now trading at around USD 0.046.
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