Cardano Chief Charles Hoskinson On Stellar’s $4B Burn: ‘Insanity’

The Cardano chief Charles Hoskinson recently had a chance to talk about the Stellar Development Foundation (SDF) and its recent decision to burn 55 million XLM tokens which were worth around billion at the time.
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Hoskinson noted that this move has created little in the way of value for Stellar and noted that the funds should have been invested in development. The main guy behind Cardano was in the crypto news through an ask-me-anything video which was live streamed on his YouTube channel earlier this week.

In the AMA session, the Cardano chief Charles Hoskinson was asked about Stellar’s XLM burn and whether he considered that the SDF’s decision is legit – or was a mistake. To this, Hoskinson answered:

“What value did [the token burn] create for Stellar? There was a short-term price appreciation that the markets took back. And they’ve permanently lost all that value that could protocol development, or for community development.”

The Cardano chief also claimed that the SDF had prioritized the short-term gains at the expense of the protocol and its integrity. In his opinion, token burns were intrinsically a bad idea. However, Hoskinson said:

“It’s like basically saying, ‘I can’t figure out what to do with this big pile of money, so I’m just going to set it on fire to make money scarcer, to give a small gift to everybody. It’s insanity. Burns never work – they’re market manipulation in the short-term for speculators at the expense of the future of the protocol.”

The Foundation was in the news before and said that Stellar “is not mined, so the lumens now in public hands are there because we’ve worked hard to get them there over the last four years.” They also pointed out that SDF “can be leaner and do the work it was created for using fewer Lumens.”

You can watch the full AMA session by the Cardano chief Charles Hoskinson below.

The Stellar Lumens news showed XLM rocking up to short of 19% after the burn. However, the token has gone into a mode of suffering along with Bitcoin and other cryptocurrencies which are deep in the red today during the most recent price tumble.

While Bitcoin (BTC) is now below $7,500, Stellar’s XLM token also lost 5% and is at $0.0589. Cardano (ADA), on the other hand, lost 6% overnight and positioned itself at $0.0369.