Stellar’s Upcoming Upgrade Will Not Include Inflation Mechanism

Stellar (XLM) Drops By More Than 4% Despite Recent Positivity Around The Project

In a recently published blog post, the Stellar Development Foundation (SDF) has announced that it will remove the inflation feature from the Stellar protocol as it seems to have no functionality at all. This means that the new and upcoming version 12, will not include it.

The announcement notes that the idea to remove the feature was first brought forward in October last year and since then, it’s been debated at length in several different meet-ups and public forums. The post reads:

“After listening to what everyone had to say and weighing the pros and cons, here’s what the SDF is asking validators to consider: we think it’s a good idea to disable the current inflation mechanism.”

The post then notes that the SDF has gone ahead to do this for the Stellar core version 12, with the hope that validators will vote to accept it.

Inflation Has Not Served Its Purpose

The inflation feature was first introduced back in 2014 as a way to generate more XLM, which would then be channeled towards several different projects built on Stellar. This was an attempt to facilitate considerable growth and development, thereby increasing efficiency in the Stellar ecosystem. However, this has not been achieved even after five years and a few million accounts.

“Rather than sending inflation to projects building on Stellar, the majority of users join pools in order to claim that inflation for themselves – if they set their inflation destination at all. Every week, the protocol creates new lumens; every week the majority of those lumens go to individual account holders or to SDF accounts.”

The SDF also believes that the inflation feature runs afoul of the network’s need for improved scalability, efficiency, and throughput. If there aren’t enough votes in support of removing the inflation feature, version 13 will have it returned.


XLM is the market’s tenth-largest digital asset, currently at $0.05.

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