Charlie Lee, the creator of Litecoin (LTC), and Whale Panda, a recognized crypto-related figure, have criticized the Stellar Development Foundation’s decision to burn 50% of XLM’s supply.
Mr. Lee said that the XLM in the market are now more concentrated on the SDF while Whale Panda explained this decision makes XLM more prone to be considered a security.Stellar Development Foundation Criticized For Its Decision
It was clear that the decision to burn 50% of the XLM supply was going to be controversial. Although it helped XLM to surge by 20% in just a few hours, its reputation may now be affected.
The Stellar Development Foundation (SDF) decided to burn 55 billion XLM tokens. The main goal was to restructure its development strategy and reduce the giveaways and airdrops, which they consider had diminishing effects.
Charlie Lee wrote on Twitter that 50 billion XLMs burned were going to be distributed to the community. However, the SDF only burned 5 billion of their 17 billion XLMs in existence.
This allowed the SDF to increase their percentage of total coins owned from 16% of the total XLM supply before the burning to 24% after it.
At the same time, Charlie Lee got surprised by the fact that they did this without any community discussions on the matter.50B XLMs burned were supposed to be distributed to the community. Stellar Development Foundation only burned 5B of their own 17B XLMs. This means SDF increased their percent of total coins from 16% (17/105) to 24% (12/50). And they did this without any community discussions.🤔🤷♂️ https://t.co/Lr3NoAGsVy — Charlie Lee [LTC⚡] (@SatoshiLite) November 6, 2019
Meanwhile, Whale Panda explained that burning 50% of the XLM supply makes this cryptocurrency more prone to be considered a security by the U.S. Securities and Exchange Commission (SEC) and other regulatory agencies in the world.
In addition to it, he stated that the chances of getting delisted...