Stellar burns 50 Billion Lumens to streamline the network and reduce excess supply. Lumens or XLM are not mined and must be distributed via the Stellar Development Foundation. Recently, the foundation announced a massive airdrop that will be deposited in keybase accounts over a 2 year period.
Today, in Mexico City, the Stellar ecosystem–a diverse family of entrepreneurs, developers, innovators, thinkers, and builders–is gathered in person for the first time. The Meridian is the perfect setting for a long-overdue update on Stellar’s giveaway programs and to announce a new mandate for the Stellar Development Foundation.
SDF’s purpose is to make Stellar the global payments standard. All of the rest of what they’d like to accomplish–empowering everyday people, transforming the global financial system–follows from the world using the network. Every dollar and lumen they have is dedicated to that end.
Whenever we spend money–whether to hire an engineer, travel to meet a partner, extend a loan to a Stellar-built business, or even pay our own rent, we ask: is this moving Stellar closer to adoption as a payment standard? We consider every option and do our best to make the most of the resources at our disposal.
What are those resources? Yesterday, there were about 105 billion lumens in existence, roughly:
- 20 billion out in the world
- 17 billion in SDF’s operating fund
- 68 billion remained earmarked for giveaway programs administered by SDF
Stellar isn’t mined, so the lumens now in public hands are there because the foundation put them there over the last four years. As for the other two allocations, in time and after a lot of thought, they’ve come to realize they’re too large. SDF can be leaner and do the work it was created to do using fewer lumens. Over the years they’ve claimed to see that giveaways and airdrops have diminishing effects, especially in the outsized amounts their original plan was designed to support. So a smaller public-facing program would have just as much impact. The network and community around Stellar are now robust enough to allow SDF to carry less weight.
So: they’ve decided to reduce their lumen allocations, and to rededicate what remains to what they now think Stellar needs most. They use approximate numbers here in the text, but the chart and table to follow detail the precise amounts in question.
Just before this announcement, they burned 5 billion lumens from their 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. We’ve plotted the next ten years of Stellar’s growth and even with our greatly increased ambitions for SDF, we’re confident these funds will be enough to see us, and the network, through.
At the same time, we’re ending Stellar’s World Giveaway Program (for individual airdrops) and our Partner Giveaway programs, both of which were created at the network’s inception. 50 billion of the 68 billion lumens in those programs have also been burned. We believe the number of lumens we hold now aligns better with our mission. SDF will not burn any additional lumens.
To burn the lumens, they have sent them to a Stellar account with no signers (including a master key weight of 0):
SDF will not burn any additional lumens.
For clarity, this is what remained after these transactions:
All told, there are now exactly 50 billion lumens in existence. Stellar Burns 50 Billion Lumens that puts the total under 30 billion of those that are still administered by SDF. That pool is a resource for the whole network. They view these as “Stellar’s lumens”, not so much owned by the Foundation as held by them temporarily to use for initiatives that support Stellar and the ecosystem. Alongside this burn, they’ve developed a new set of strategic objectives for SDF, and they are publicly committing to using them pursuant to the plan below.
We’ve designed the new mandate with the future of the network foremost in mind, but as you’ll see below we’ve also tried to tie each allocation back to our original vision. We’re extremely excited about this renewed focus for SDF and also about the transparency we will bring to these efforts. Each allocation will be set aside in its own account before the end of the year, and we’ll publish the addresses, so the Stellar community can track our progress and see our commitment to this plan.