Stellar has successfully completed its scheduled Protocol 12 upgrade, effectively disabling inflation for the network's cross-border payments-focused crypto, Stellar Lumens.
The Stellar Development Foundation, the non-profit that spearheads the development of Stellar, proposed three "Core Advancement Proposals" for the upgrade when they announced it at the start of October-modifications that were put into effect at 1600 UTC on Monday after a majority of the network's nodes voted to proceed.
The new protocol has made good on a year-old plan to eliminate inflation from XLM, the 11th-largest cryptocurrency by market capitalization.
Prior to Protocol 12, Stellar's built-in inflation mechanism added one percent to the total supply of lumens every year, paid out on a weekly basis to accounts receiving the most votes from other stakeholders in the network, the votes of larger XLM holders carrying more weight.
The key assumption behind this operation was that community members would be encouraged to donate to projects in the Stellar ecosystem, the logic behind central banks setting inflation targets to encourage consumer spending.
After a year of public discussion on the subject, the SDF came out with a conclusive argument saying Stellar projects weren't benefiting from the model as XLM holders were either claiming the inflation for themselves or ignoring the voting process altogether.
Intriguingly, the latest upgrade allows the inflation operation to be easily switched back on.
XLM bulls seem to have remained largely indifferent to news of the inflation suspension, which in theory makes the token a better speculative investment.
As a result of the Stellar protocol change to end inflation, Binance announced that it is discontinuing its Stellar staking program.
"Binance will distribute staking rewards earned from Stellar earned up until the time of the upgrade, which occurred at 2019/10/28 4:00 PM. Users will still receive the October XLM distribution in the first 5 days of November. Moving forward, users will no longer receive any Stellar rewards."
Stellar ends inflation of XLM with latest protocol upgrade
Published on Oct 30, 2019
by Cryptoslate | Published on Coinage
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