The Stellar Development Foundation burned 55 billion of its XLM tokens, more than half of the supply of the cryptocurrency, CEO Denelle Dixon announced on Monday’s Stellar Meridian conference stage.
105 billion XLM had existed previously, with 20 billion in circulation. The supply has shrunk to 50 billion with this burn.
“We didn’t want to start burning. We began by asking, ‘ What are we needing? Dixon told about 200 attendees in the room.” It was very difficult to get them into the market as much as we wanted to use the lumens we held.
Instead, the organization decided it was better to project how much it could actually use and calibrate to that number over a 10-year period. “There is no point in deriving a plan from an arbitrary number,” Dixon said.
The crowd warmly welcomed the news, many of whom probably own the token. One participant in the packed room stood up and asked everyone to applaud Dixon, which they did.
According to data provider Nomics, the price of XLM jumped about 14 percent to $0.08 in the hour after the announcement.
Dixon told CoinDesk that she was unable to anticipate the reaction of the crypto market, saying:
“I don’t know. I really just don’t have a sense at all of what the market response is. From my standpoint, it’s how the ecosystem feels about it. We got a lot of positive response from the ecosystem because we are rightsizing what the foundation has and the foundation holds.”
Thirty billion XLM are now controlled by the foundation, divided into several seals. It has 12 billion XLM to support the organization in the direct development fund (formerly called “operations”).
It has 2 billion XLM left in “ecosystem support” (1 billion for currency support and 1 billion for grants for infrastructure).
Stellar has invested 10 billion XLM (2 billion XLM for new products and 8 billion XLM in its corporate fund).
Lastly, the foundation has 6 billion XLM (2 billion for stellar marketing and 4 billion for in-app promotions) under user acquisition.
XLM’s supply is now fixed as the token holders community voted to stop inflation on Oct. 28.
“SDF won’t burn any extra lumens,” said Stellar.