Stellar, the world’s tenth-largest cryptocurrency by market cap, has seemingly jumped in price by more than 20 percent over the past day following an announcement by executives that the currency would undergo a massive “burn.”
Stellar Is Up in Flames
The process of “burning” crypto involves deleting it from existence. It does not reside on any blockchain or ledger, nor can it be purchased or added to any wallet address. The currency is gone, and it can never be bought, sold or traded in the future.
Stellar Development Foundation chief Denelle Dixon explained:
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.
Following the announcement of the burn, the currency shot up in price. This behavior is to be expected. With less units available, the currency has seemingly become rarer and is now harder to obtain by industry standards, but the move has also led to some controversy.
Many enthusiasts claim that companies like Stellar, which burn a heavy portion of their crypto units, do so as a means of inspiring sales and boosting their statuses among crypto rankings. With the currency now less available, its rarity causes the value to increase. Thus, many traders are looking to get their fingers on available units before they run out. Sale rates improve, and the currency’s popularity shoots through the roof.
It’s a solid tactic; one that produces notable results, but many believe it’s also very manipulative. Overall, approximately 55 billion XLM tokens have been burned at press time, and the currency has added more than $200 million to its overall value.
I don’t know [how the stellar, bitcoin and wider cryptocurrency market will react]. I just don’t have a sense at all of what the market response is. From my standpoint, it’s how the ecosystem feels about it. We got a lot of positive response from the ecosystem because we are rightsizing what the foundation has and what the foundation holds.
Get Rid of the Excess
At the time of writing, the Stellar Foundation still controls more than 30 billion XLM tokens, suggesting that it’s along the same lines as Ripple and probably not a decentralized coin. In a blog post, the organization wrote:
We [have] burned five billion lumens from our operating fund. It now stands at 12 billion lumens. This reduction isn’t in any way a retreat from our mission. It’s an acknowledgement that we owe it to the ecosystem, to the network, and to ourselves to be as efficient as possible in our work… The lumens now in public hands are there because we’ve worked hard to get them there over the last four years.
Stellar (XLM) Keeps Declining
On November 19th, the XLM keeps decreasing in price, generally trading at $0.0657.
On D1, the XLM/USD quotations have broken out the resistance line of the long-term channel. The breakout was quite confident but now the prices are forming an impulse of decline to the local support near $0.0626. A breakout of this level may let the quotations fall to $0.0440. The resistance is near $0.0875. Further decline is confirmed by a Black Cross forming on the MACD.
On H4, the downtrend can be seen in more detail, and the channel looks rather stable. However, the scenario with a bounce off the target support level should not be ignored. On the Stochastic, the lines have entered the oversold area, which might mean upcoming correctional growth to the local resistance at $0.0720. However, the growth needs to be confirmed by a Gold Cross on the oscillator.
50 million of XLM coins were transferred to the Kraken exchange. It was evaluated as $3.6 million, and the price of the Stellar token declined immediately.
It is known that the coins were transferred by Stellar Development Foundation (SDF). The reason for the sale is unknown but it might be normal market interests.
One more reason for the XLM to fall might have become the completion of the airdrop process sized $120 million. During it, the participants received 500 tokens averagely, each costing $35 at that moment. The coins were transferred to the participants’ wallets. It would be logical to suppose that the users started selling those coins, which actions could pull down the XLM quotations.
All in all, the XLM volatility remains high in November. First, the SDF exterminated more than half of the emission of its tokens, which was $4 billion. After that, the exchange rate started growing but the trend turned out unstable.
50 Mln XLM Moved From Stellar Development Foundation to Kraken, Community Expects a Dump
The community is indignant and expects a dump on the market as Stellar Development Foundation moves 50 mln XLM to the Kraken crypto exchange.
As reported by the Whale Alert Twitter page, on Sunday, the Stellar Development Foundation (DSF) wired 50 mln XLM to the Kraken exchange. In the comment thread, the community expresses its indignation and despise towards an expected XLM dump.
Whale Alert reports a 50-mln-XLM transaction
Nearly 20 hours ago, the SDF transferred slightly over $3,600,000 in XLM to the Kraken exchange. The Stellar community is now expecting a dump and is showing disappointment in the comment thread and, therefore, expecting an XLM price decline.
In the case with XLM, the Stellar community seems to believe the situation is the same as with numerous XRP releases made by Ripple Inc from escrow or when it merely sent large amounts of the coin to various organizations, including charity ones.
Many in the XRP community reckon that these ‘XRP dumps’ are preventing the price of the coin from surging. It has remained below $0.3 for a very long time and seems unable to get over this level.
The XRP army has been looking forward to a rise of the price, since Ripple keeps striking new partnerships (over 300 new customers this year). One of the biggest clients added thi year is the global remittance service MoneGram that now uses On-Demand Liquidity and XRP.
The recent XLM token burn
About two weeks ago, Stellar eliminated around half of the total supply, having burned 50 bln tokens. This made the XLM price surge 25 percent. However, the community took this coin burn skeptically.
As reported by U.Today last week, XLM was among the five coins added to the Coinbase debit crypto card, along with XRP.
Stellar Lumens News Today – Top Headline for Stellar Lumens
- Stellar’s Jed McCaleb Talks About Bitcoin, Stellar and Mt. Gox
Stella’s CTO and founder Jed McCaleb, recently talked about Bitcoin, founding Stellar and the Mt.Gox saga. The Stellar blockchain was created to rival Ripple. In our previous Stellar Lumens news, we talked about how McCaleb was also the co-founder of Ripple. He eventually left the Ripple team to develop Stellar which is powered by the Stellar Lumens XLM token. While Ripple is planning to disrupt the global financial system, McCaleb said that he has no plans to disrupt the system.
Jed McCaleb Shares His Thoughts on Bitcoin, Stellar and Mt. Gox
During a talk at the CoinAgenda 2019, he told Michael Tarpin about his interest in the cryptocurrency space and his journey to Bitcoin. In his words;
“I just like working on things that are interesting to me, and that can change the world for the better.”
The first blockchain-related application developed by McCaleb was eDonkey. It is a decentralized peer to peer file-sharing network. He said that after he created the application, he came across the Bitcoin white paper online. He continued;
“I was super excited,” said McCaleb. “I didn’t think it was possible to solve [the double-spend] problem before I read the white paper. It was super interesting to me and, about two weeks later, I had made the Mt. Gox exchange, because at the time there wasn’t a good way to buy or sell bitcoin, and I wanted to experiment with the technology to learn the system.”
He said that he created the Mt. Gox exchange for fun. He said he never intended on running an exchange long term and that was why he was looking for someone to take over. He eventually chose Mark Karpeles He went on;
“The Bitcoin world back then was much, much different than it is today,” he said. “When I joined BitcoinTalk, which is where everyone that knew about Bitcoin had an account, there were about 2,000 people. By the time I gave Mt. Gox to Mark Karpeles, there were like 5,000, 10,000 people––something like that.”
He said that Karpeles ended up being an incompetent leader of Mt. Gox. After he handed Mt. Gox to Karpeles, he moved on to his next project but never struggled to find the solution for the consensus problem that Bitcoin intended to solve. He also complained about the energy requirement for Bitcoin mining as they cause environmental issues. He talked about how Bitcoin inspired him and everything he did to improve the Stellar blockchain.
Stellar (XLM) Price Today – XLM / USD
For now, Stellar isn’t as popular as Ripple but it serves the same purpose. The Stellar Lumens token took a hit over the last few months just like Ripple XRP. There is no way to determine how long rivalry between both blockchains will last.