Uniswap Founder Destroys $650 Billion HayCoin to Fight Speculation
In a surprising move, Uniswap founder Hayden Adams recently burned a staggering 99% of the HayCoin (HAY) supply. The decision was announced on X (formerly Twitter) and was motivated by concerns about excessive price speculation surrounding the token.
The Origins of HayCoin
HayCoin was originally deployed by Adams for testing purposes five years ago, before the launch of Uniswap. At the time, gas costs were significantly lower, allowing for the use of the mainnet as a testnet. Adams created a small liquidity pool with a minuscule portion of the total supply, keeping the majority of HAY tokens in his own wallet. However, in recent weeks, HayCoin started to experience speculative trading, with prices reaching six-figure levels.
“Over the years, a few people have noticed it and bought it as a joke/for the novelty of it. Was extremely surprised to see people buying and selling significant dollar amounts this past week, treating it like a memecoin. Crypto can be weird sometimes.“
Recognizing that this excessive speculation was negatively impacting the token’s reputation, Adams made an unconventional decision.
The Token Burning
Adams took action by burning approximately $650 billion worth of HAY tokens. By burning the tokens, they are permanently removed from circulation, creating a deflationary impact. As a result, the remaining HAY tokens become scarcer, potentially driving up their price.
“Ultimately, I’m uncomfortable owning almost the entire supply (~99.99%) of a token that people are memeing and speculating on, so I decided to burn the full amount in my wallet (”valued” at an absurd ~$650b).“
Reactions and Potential Tax Considerations
Although Adam’s move garnered attention and generated discussions, some users questioned the potential tax implications of token burning. Specifically, they raised concerns that this action could be considered a taxable event. One user pointed out that assuming a cost basis of $0, a disposal of approximately $650 billion could result in a long-term capital gains liability of around $128 billion.
Others suggested that Adams could have sold the tokens before burning them and donated the profits. Nonetheless, Adams made the decision to remove the tokens from circulation entirely.
The Impact on HayCoin’s Price
Following the burning of HAY tokens, the price of the remaining tokens experienced notable volatility. At the time of writing, the HAY token is being traded at $2,392,640, reflecting a surge of over 235% in the past 24 hours, according to CoinGecko. It remains to be seen how the market will react in the long term.
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