30 billion XLM allocated; 9 billion XLM in escrow.
The Stellar Development Foundation (SDF) has published a mandate that outlines its plans for future spending. SDF currently holds 30 billion Stellar lumens (XLM), an amount roughly equivalent to $1.3 billion. The company is tasked with spending those funds on growing Stellar — primarily in the areas of development and promotion.
SDF previously announced this mandate in early November. However, today’s news shows that it has actually set aside funding. As of Dec. 20, 9 billion XLM ($400 million) has been transferred to three escrow accounts set to unlock annually until 2023. The rest of the funds will be distributed over the next ten years or sooner, SDF says.
SDF’s mandate indicates that 12 billion XLM is allocated to direct development. These funds will be spent on Stellar itself, as well as salaries, operational costs, policy efforts, business relations, and other pursuits. SDF notes that it often sells XLM in this category on exchanges, so a portion of these funds may end up in the circulating supply.
SDF has additionally dedicated 10 billion XLM to use-case investments, which it will spend on new projects, venture capital-style backing, and acquisitions. The company has separately allocated 2 billion XLM to support the Stellar ecosystem; this involves grants to independent projects, developer events, and currency-issuance efforts.
Finally, SDF has reserved 6 billion XLM for user acquisition. Funds in this category will partially go toward marketing campaigns. However, a portion of these funds will also reach users directly through in-app distribution and airdrops — such as Stellar’s ill-fated Keybase airdrop, which was prematurely discontinued this month.
In November, SDF reduced its holdings from 85 billion XLM to 30 billion XLM. This token burn also destroyed about half of Stellar’s entire supply, which currently stands at 50 billion XLM. This decision should drive up the value of each XLM token: “SDF can be leaner and do the work it was created to do using fewer lumens,” the company noted.
Stellar also discontinued inflation in October on the grounds that inflation rewards failed to reach ecosystem projects. Instead, users often claimed those rewards for themselves. The end of inflation means that ecosystem funding must be drawn from existing funds, something that SDF’s new mandate should be able to do more effectively.
Incidentally, Stellar is not the only project that is making changes to its funding model. Zcash’s two main organizations are locked in an ongoing trademark battle that could affect the project’s funding structure. Meanwhile, Parity Technologies has withdrawn support for its Parity Ethereum client, forcing it to move to a DAO funding model.
The post appeared first on CryptoBriefing
