Gala Games Burns Over $600 Million Worth of GALA Tokens

Gala Video games introduced this week that it has eliminated or “burned” nearly 21 billion GALA tokens after finishing its V2 token airdrop—greater than $637 million value on the time of the burns—from its personal reserves in an effort to cut back considerations surrounding a doable “dump and exit” state of affairs.

“The tokens we maintain now we have acquired as ecosystem rewards during the last a number of years,” the Gala Video games crew wrote in a weblog publish. “Whereas they’ve all the time been tokens we have been to make use of to fund the expansion and curation of the ecosystem, we all know that many individuals see them as a elementary danger to the general tokenomics of the challenge.”

In brief, Gala Video games believes that the huge token burn will assist scale back concern amongst holders who could fear that the corporate may dump mass quantities of its token—a transfer which may result in a decline in value.

Gala detailed its method to the burn within the publish, noting that it had already deliberate to burn 2 billion GALA tokens as a part of its “2023 Imaginative and prescient Paper” for the yr. One other 3.96 billion tokens have been then burned, which Gala Video games stated was “equal to the whole income in GALA now we have ever acquired.”

The extra and largest burn of 15 billion tokens represents Gala’s response to group considerations over the famous “dump and exit” chance. Gala pointed to on-chain Ethereum community transactions for every a part of the general token burn, and wrote within the publish that it represented $660 million value of tokens. In accordance with CoinGecko information, the tokens have been collectively value roughly $637 million on the time of the burns.

Gala Video games—the writer behind Web3 video games like Mirandus, Grit, and The Strolling Lifeless: Empires—additionally burned the tokens with its future in thoughts, the agency’s President of Blockchain Jason Brink instructed Decrypt in a message.

“At a elementary degree, we consider that if the ecosystem goes to work and be sustainable within the long-term, we’d like to have the ability to reside off the rewards we obtain from the ecosystem as properly—not have a huge pile of GALA we may dip into each time,” Brink stated.

The chief added that post-burn, Gala’s personal treasury is now “nearly utterly eradicated.”

“It additionally implies that rewards for Founders Node operators will go up roughly 4x as a result of the halving is supply-based,” Brink added of the rewards for individuals who function Gala nodes, which validate crypto transactions for the community.

Brink shared Wednesday that almost 160,000 totally different wallets acquired upgraded tokens because the agency finalizes the contract improve and deprecates its previous token. 

Earlier this month, Brink confirmed that Gala is sending new GALA “V2” tokens to holders of GALA “V1” tokens, as a result of numerous technical upgrades have been made doable through a reissuance of the token. Main U.S. crypto alternate Coinbase made a public announcement that it could not help or facilitate the Gala V2 airdrop—however didn’t share a motive as to why.