November 11, 2019, 7:00AM EST
• 3 min read

Stellar lumens token burn displaying market price inefficiencies

Quick Take

  • After observing “diminishing results” from its token giveaways, the Stellar Development Foundation chose to burn 55 billion of the existing 105 billion lumens (XLM) rather than mostly distribute it via airdrops and partnership programs
  • Although the token supply had been effectively reduced by approximately 50%, the price of XLM only went up ~20% after the announcement
  • This could possibly be a signal that XLM was overpriced to begin with
  • Given the lack of token-specific catalysts and high correlations to Bitcoin prices, perhaps the potential reward is not worth the risk for short sellers leading to inefficient market prices

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