Hayden Adams, the founder of Uniswap, recently sent 99% of the circulatory supply of HayCoin to burn addresses. He confirmed the action citing concerns around the price of the coin.
On this account, he posted an update on social media platform X. It means that the majority of Hay tokens have been removed permanently from circulation.
As per Adams, HAY tokens were first introduced five years ago before Uniswap was publicized as a decentralized exchange. To control the product, he sent a test liquidity pool that contained a small portion of the total supply of HAY coin.
However, the founder kept 99.9% of the HayCoin token reserved in a privately owned wallet. The token started trading as a meme currency on the internet with a six-figure value. He retained that investors have bought it as a novelty purchase but it gained massive traction during the last few weeks.
The Sudden Rise of HAY Tokens
Talking about the incident, Adams retained that around $650 billion HAY coins were sent to burn addresses. He claimed that the sudden rise in the price was an unexpected development and claimed that he did not wish to connect the profile picture with the coin.
He further retained that he held the majority supply of the given cryptocurrency that investors are trading as a meme currency and speculating.
Therefore, he has sent around $650 billion worth of Hay tokens to burn addresses. When a cryptocurrency is sent to a burn address it is taken out of the circulatory supply for good.
At the same time, it also generates an inflationary impact on the price of the remaining tokens. On this account, the current price of HAY coin has reached $2,392,640 per unit indicating a 235% increase during the last 24 hours as per CoinGecko statistics.
Reasons Behind Token Burning
There is considerable speculation and talk around HAY tokens going among the cryptocurrency community. The investors who are following the news has retained that token burning in this instance may be a taxed action.
One user on X claimed that considering the cost basis of $0, burning $650 billion tokens could levy a tax obligation of $128 billion in long-term capital gains. Meanwhile, there are others who believe that Adams has the option to sell a few tokens before burning the supply and contributing to charitable causes.
Uniswap also Imposes Swap Fees
On the other hand, Uniswap also announced recently that it is going to start charging a swap fee of 15%. On the other hand, the decentralized exchange received mixed reviews from traders following the announcement of Know Your Customer or KYC checks.
Uniswap v4 open-source directory contains a hook that adds KYC checks for the investors on a decentralized exchange. However, some users on X have maintained that implementing user account verification can allow the DEX to get a whitelisting from regulators.
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