Stellar Development Foundation burns more than half of Lumen supply with new strategy focus

Stellar’s foundation has burned more than 55 billion Lumen ($XLM) tokens as it moves away from airdrop programs. Previously the foundation had retained 68 billion Lumens earmarked for giveaways in order to grow the community. Citing a declining utility from airdrops the SDF burned 50 billion of those tokens along with 5 billion of the 17 billion previously held in its operating fund. The team laid out a new strategy that focuses on developers and building the ecosystem using the remaining XLM held by the SDF.

Why it matters:

• Supply overhang from vesting tokens or those held by treasuries can lead to high levels of dilution for investors. By burning these tokens the SDF can help reassure investors, though even with the burn the SDF still controls the majority of Lumens
• Stellar’s supply dynamics are becoming more clear. Just last month the network upgraded to a new version that removed the creation of new coins, most of which went to the SDF as the largest holder of Lumens.