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Stellar Development Foundation Pockets 98 Percent of Newly Created XLM Tokens

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Tue, 01/07/2020 - 17:07
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  • Controlling 80 percent of XLM's total supply allowed the SDF to collect 98 percent of all inflation payouts.

Cover image via 123rf.com
Contents

According to a new report released by cryptocurrency analytics startup CoinMetrics, the Stellar Development Foundation (SDF), a non-profit organization that develops the Stellar network, has accumulated a staggering 98 percent of all XLM tokens issued after the implementation of the inflation mechanism. 

The SDF shared 5.482 bln XLM (the total amount of all inflation payouts) with the other 23 participants, which included exchanges, pool addresses, and big holders.     

XLM
image by coinmetrics.substack.com

CoinMetrics explains that the SDF's designated itself as an inflation destination and constantly took part in the inflation process.    

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A failed experiment 

Inflation was implemented by Stellar in order to ensure the continuous growth of the project's ecosystem. The initial supply of 100 bln XLM will increase by exactly one percent every year. 

Any XLM account that gets at least 0.05 percent of the weekly vote can become the destination of inflation and get the number of lumens corresponding to the total number of votes. This measure backfired since unscrupulous actors were incentivized to create pools to pass the abovementioned threshold and earn all the rewards without actually contributing to the project ecosystem, which the founders of Stellar certainly didn't expect to achieve.              

Stellar eventually decided to abandon inflation in the 12th version of its protocol. 

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Can things get worse for XLM?

Pocketing 98 percent of all newly minted coins is not a good look for the SDF given that it already controls 80 percent of the total supply. Similarly to Ripple and XRP, Stellar's XLM faces a lot of criticism due to a high level of centralization. Notably, both of these projects were co-founded by Mt. Gox creator Jed McCaleb

As reported by U.Today, XLM turned out to be the worst-performing major cryptocurrency of 2019 with its price plunging by more than 66 percent. Burning half of the token's supply back in November allowed XLM to see short-term gains that quickly evaporated. 

Overall, XLM is currently down by 95 percent since reaching its all-time high of $0.89 on Jan. 4, 2018.  

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Ripple Unleashes One Bln XRP from Escrow, Community Expects Price to Drop

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Wed, 04/01/2020 - 08:27
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  • It is the first day of the month and Ripple has released one billion XRP from its escrow wallet. The community traditionally expects a price drop after such massive dumps

Cover image via stock.adobe.com

It is the first day of another month – this means that Ripple has lavishly thrown XRP from its escrow wallet – one billion coins. Since the start of 2020, this monthly dragon-sized amount was withdrawn in two portions of 500 mln XRP each.

XRP escrow
Image via Twitter

While the XRP price is in the green zone, trading at $0.173095 on CoinMarketCap, the comments under the tweets about the XRP release signify that the community is either indifferent (having got used to these releases already) or is expecting another price drop in the short term.

In January 2018, XRP, the third-largest cryptocurrency, reached an all-time high of nearly $3. Since then, XRP has been light years away from the ATH.

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Many skeptics say that the XRP price is not going to rise even in the long term, mocking those who remain faithful, holding bags of the coin.

As earlier reported by U.Today, many in the community believe that regular XRP releases made by Ripple prevent the price from rising and reaching at least $1. In 2019, a petition was set up on Change.org by crypto influencer ‘Crypto_Bitlord’ who wanted Ripple to stop dumping XRP.

Curiously, later on, another petition appeared on the same platform, requesting Ripple to accelerate the release of XRP in order to increase the coin’s adoption, which would assumingly lead to a massive price surge.

About the author

Yuri is a journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future. ‘Hodls’ cryptocurrencies. Has written for several crypto media. Currently is a news writer at U.Today.

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