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In a bid to lower inflation the EOS ecosystem has taken the decision to remove 34 million tokens (amounting to a current USD equivalent of $167 million) from the circulating supply.
The EOS Block producers arrived at a majority decision back on July 31, 2018, which proposed the burning of 34 million EOS tokens. tokens which are idly stabled within the platforms savings account.
The reason behind the burn was to reduce the EOS' yearly inflation rate of 5% to just 1% a year. The previous rate stood at a total of 5% inflation, with 4% allocated to the EOS savings account and 1% of the inflation going to EOS block producers.
The savings account was initiated back in January last year when EOS was first launched and has since sat idly by with no real plans for allocation.
A proposal for the burn read as follows:
“This large quantity of accumulated tokens has now become excessive and if we continue to allow it to keep growing, it will eventually become an attack vector for the network,”
The burn was officially carried out on May 7th with 34,171,037 EOS effectively erased. However, allocation to the savings account will still continue until the vote inflation rate reduction is passed.
This burn stands as fairly good news for EOS HODLers as supply and demand principles dictate that each EOS token will be worth that little bit extra thanks to the lowered supply.
Eos currently isn't reflecting this at the at time of writing, however, with price action citing a fairly stagnant journey since the burn.
EOS/USD Chart provided by Tradingview
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