Stellar’s XLM Skyrockets 30% This Week After Founders Burn 55 Billion Lumens
- Stellar’s XLM jumps by more than 30 percent in two days.
- The upside move came after the foundational body announced that they were burning the XLM supply.
- The rival community accused the Stellar CEO of orchestrating the XLM pump.
Stellar’s native asset XLM registered fresh gains on Tuesday as its founders decided to wipe out half of the token’s net supply.
The Stellar Development Foundation (SDF) announced yesterday that it has burned 55 billion XLM tokens. Earlier, the total supply of XLM was 105 billion, out of which 20 billion were in circulation. The foundation’s CEO Denelle Dixon stated that they removed 5 billion XLM from their operating fund and 50 billion XLM from their airdrop program.
The XLM-to-dollar exchange rate was trading at $0.09 as of 0805 GMT, up 13.2 percent since midnight. The latest pump brought the pair’s 48-hour gains up by more than 30 percent, making Stellar the most profitable blockchain project on a month-to-date basis. Meanwhile, XLM also fared well against its top rival Bitcoin, rising by up to 31.46 percent against it in the past 48 hours. At its intraday highest, the XLM-to-BTC exchange rate was 976 sats.
The upside tick nevertheless came after a depressive 2019. XLM earlier plunged by more than 80 percent against BTC, establishing a year-to-date low of 556 sats on September 13. The Stellar token rebounded only after Bitcoin’s uptrend halted near the $14,000 level in July, showing that the gains came from traders’ hedging strategies instead of solid fundamentals.
Why So Burning?
The sudden-burn led critics – mostly followers of the XLM rival groups – to say nasty things about SDF. Many said that Dixon & Co. was running out of good news so they merely planned to create one. Leo Cheng, the co-founder & CEO of Machi X, even said the XLM is useless as a utility token and burning half the supply of something that’s “worth zero still makes it zero.”
Nevertheless, SDF clarified in its announcement that the reason it was pulling the plug on 55 billion XLM tokens was simple: they didn’t need them. Excerpts from their statement:
Over the years we’ve also seen that giveaways and airdrops have diminishing effects, especially in the outsized amounts our original plan was designed to support […] 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 XLM-to-dollar exchange rate was correcting at the time of this writing. The pair had dropped by more than 10 percent but it’s intraday bias remained bullish.