- Stellar Development Foundation (SDF) bags 98 percent of all inflation payouts
- Stellar’s XLM faces criticisms due to a high level of centralization
Stellar Lumens News Today – The Stellar Development Foundation (SDF) has accumulated about 98 percent of all XLM tokens issued after the implementation of the inflation mechanism. This was revealed in a recent report released by CoinMetrics – a digital currency analytics startup. The Stellar Development Foundation (SDF), a non-profit organization that develops the Stellar network, shared 5.482 billion XLM tokens (the total amount of all inflation payouts) with the other 23 participants, including pool addresses, trading platforms, and big holders.
Stellar Development Foundation (SDF) Bags 98% of All Inflation Payouts
According to the report by CoinMetrics, the Stellar Development Foundation designated itself as an inflation destination and took part in the inflation process constantly. Stellar Lumens implemented inflation to ensure the continuous growth of the project’s ecosystem. The Foundation released an initial supply of 100 billion XLM tokens that were supposed to increase by about one percent every year.
Stellar (XLM) Price Today – XLM / USD
Any Stellar account that gets a minimum of 0.05 percent of the weekly votes can become an inflation destination and would get the number of lumens corresponding to the total number of votes. This approach failed since devious actors were incentivized to create pools to pass the voting threshold and collect all the rewards without even contributing to the ecosystem of the project. This is certainly not what the founders of the project expected to achieve. The Stellar Development Foundation decided to do away with inflation in the 12th version of its protocol.
Stellar Faces a Lot of Criticisms
Bagging 98 percent of all newly minted token is not a good look for the Stellar Development Foundation. This is also coupled with the fact that the SDF already controls 80 percent of the total supply of the digital currency. Similar to XRP and its parent firm Ripple, the native currency of Stellar is facing a lot of criticisms due to a high level of centralization. Remarkably, these two projects were co-founded by the creator of Mt. Gox – Jed McCaleb.
According to a recent report by Smartereum, Stellar Lumens (XLM) ended 2019 as one of the worst-performing digital currencies. All through the year, the price of the digital currency dropped by more than 66 percent. The Stellar Development Foundation also burnt more than 50 percent of the total supply of the token back in November. This helped the digital currency to see short-term gains, but it was not able to hold the gains as it experienced a sharp decline a few days later. Since it tested its all-time high of 89 cents in January 2018, XLM price is down by 95 percent.
Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.