As announced on Nov. 4, the Stellar Development Foundation (SDF) realized that the total Stellar Lumens supply was “too large” for its reshaped development strategy and burned over half of it. The XLM token burn is a part of the “new phase of Stellar’s growth,” as the team claimed.
55 billion Stellar Lumens were burnt:
Together with 20B XLM in circulation, the current total Stellar Lumens supply accounts for 50B XLM.
As explained in the announcement, giveaways and airdrops have been “the least effective programs for Stellar,” so it was decided to leave only 6B XLM from the original pool. The Foundation plans to use 2B on marketing support and 4B more on airdrops through Stellar-based apps and services.
12 billion XLM left in SDF’s operating fund were escrowed and 3B XLM will be unlocked per year for the next four years. These funds will be spent on direct development and advocacy for Stellar. They are planning to expand the team from 60 members now to roughly 120 by the end of 2020.
The12 billion XLM that were previously allocated to partnership programs will now be spent on grants, developers’ support, creating new products, and building the Stellar Enterprise Fund for investing in Stellar ecosystem businesses.
“We believe the number of lumens we hold now aligns better with our mission,” claimed the developers. According to the official blog post, SDF is not planning to burn any additional lumens.
The XLM price responded to the announcement and surged 23% from $0.07 to $0.086. Soon after there was a slight correction, and at press time, XLM is trading at $0.082, which is still 17% higher than its yesterday’s price.