MEXICO CITY – The Stellar Development Foundation has burned 55 billion of its XLM tokens, over half the cryptocurrency's supply, CEO Denelle Dixon announced from the stage of the Stellar Meridian conference Monday.
Previously, there had been 105 billion XLM in existence, with 20 billion in circulation. With this burn, the supply has shrunk to 50 billion.
"We didn't start by wanting to burn. We started by asking, 'What do we need?'" Dixon told the room of roughly 200 attendees. "As much as we wanted to use the lumens that we held, it was very hard to get them into the market."
The organization decided instead it was better to project how much it could actually use over a 10-year period and calibrate to that number. "To derive a plan from an arbitrary number serves no purpose," Dixon said.
The news was greeted warmly by the crowd, many of whom likely own the token. One participant in the packed room stood up and asked everyone to give Dixon a round of applause, which they did.
In the hour following the announcement, XLM's price jumped about 14 percent, to $0.08, according to data provider Nomics.
Dixon told CoinDesk that she couldn't anticipate how the crypto market might react, saying:
The foundation now controls 30 billion XLM, divided into several buckets. It has 12 billion XLM in the direct development fund (formerly called "operations"), to support the organization.
In "ecosystem support" it has 2 billion XLM remaining (1 billion for currency support, and 1 billion for infrastructure grants).
Stellar has 10 billion XLM set aside to make investments (with 2 billion XLM for new products, and 8 billion XLM in its enterprise fund).
Finally, under user acquisition, the foundation has 6 billion XLM (2 billion for marketing stellar and 4 billion for in-app promotions).
The supply of XLM is fixed now because the community of token holders voted to discontinue inflation on Oct. 28.
Denelle Dixon and Jed McCaleb, Stellar's founder, on stage at Stellar Meridian, Nov. 4, 2019, photo by Brady Dale for CoinDesk
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