Stellar, a payment network and blockchain protocol for cross-border transactions, plans to remove its inflation feature in a future upgrade. The Stellar Development Foundation team recently announced the turn of events in a blog post on the 30th of September. According to it, the feature will be removed as it no longer serves its purpose for users.
While the removal is not decisive, the team decided to reach consensus by creating a vote on whether the function should be removed in the upcoming version 12.
The function is already not available in the ready-to-be-launched version, but the Foundation decided to create a vote on the issue and actively encourages the community to accept the removal.
The vote will last until the 28th of October, after which the development team will decide whether to reintegrate the feature or to keep the new version as it is.
Originally, the inflation feature acted as a tool for project to gather additional funds from community transactions. However, the problem of adoption appeared in 2014 where the development team realized that the function is not reaching real use case adoption.
The Stellar Development Foundation stated that even after five years and several million created accounts, it is ‘clear that inflation did not serve its purpose.’ The team added that the funds gathered by the inflation mechanism were meant to reach projects that built themselves on the Stellar platform. Instead, the opposite happened and a significant portion of users used the mechanism to gather funds for themselves.
As of now, users will have to wait for Version 13 to use the feature again, in the case that the community decides that the mechanism is necessary. Since the original announcement, Stellar’s XLM has reacted positively to the news. However, the value of the token has only slightly increased, with the news having no serious bearing on the price.
Both the Ripple and Stellar communities share a similar fate, as both projects have lost their value due to a large number of tokens being released to the market. While the Ripple team has good faith that their decisions will have a positive long-term impact, it is uncertain why Stellar decided to do a massive number of airdrops in recent years.
The constant token giveaways resulted in XLM reaching $0.06, from its all-time high of $0.93. While the end of the 2017 bull run certainly had a significant effect on the loss of value, the Stellar team has essentially buried the project, lowering its value even further.
Their decisions may even result in a possible investigation by the U.S. Securities and Exchange Commission, as the developer team’s influence on the price may warrant for the token to be categorized as a security. If this were to happen, the 10th ranked cryptocurrency project according to CoinMarketCap could face a considerable loss.