Creator and Managing Director of the Litecoin Foundation Charlie Lee, has pointed out that the Stellar Development Foundation’s (SDF) recent burning of more than half of all Lumens in existence, might have more to it than meets the eye. According to Lee, of all the XLM that was recently burned, only 5 billion belonged to the foundation.
Taking to Twitter, Lee added a few specifics to the story, suggesting that the SDF’s burn was probably just a way to increase the percentage of tokens it holds, against all coins in existence. In his tweet, Lee said:
“50B XLMs burned were supposed to be distributed to the community. Stellar Development Foundation only burned 5B of their own 17B XLMs. This means SDF increased their percent of total coins from 16% (17/105) to 24% (12/50). And they did this without any community discussions.”
SDF CEO Denelle Dixon had revealed on Monday that the foundation destroyed 55 billion XLM tokens, representing more than 50% of all XLM that was in existence at the time. Specifically, 20 billion XLM tokens were in circulation out of a 105 billion total, which means that the XLM currently available is 50 billion.
Speaking at the Stellar Meridian conference, Dixon had explained the organization’s decision to take such a drastic step, saying that the SDF didn’t just set out on a destruction spree. According to her:
“We didn’t start by wanting to burn. We started by asking, ‘What do we need?’. As much as we wanted to use the Lumens that we held, it was very hard to get them into the market.”
Instead of indefinitely holding on to Lumens it couldn’t use, the SDF decided that the best course of action would be to figure out its needs for the next decade and how much XLM it would require to satisfy said needs. This means that the organization most likely concluded it wouldn’t need 50 billion XLM.
It would seem, however, that the XLM community was okay with the news for two reasons. Firstly, participants at the conference seemed to react well and welcomed the decision. Secondly, within one hour after the announcement, XLM surged to $0.08, jumping 20%.
However, Lee’s opinion is worth considering. If the SDF’s decision was a lot more than disposing “unusable” tokens and was an actual ploy to increase its control of tokens in existence, the XLM community might have a problem on their hands especially as it could easily spark discussions about centralization.