In an unprecedented move, leading gaming company Gala Games obliterated nearly 21 billion of its (CRYPTO: GALA) tokens, equating to more than $637 million at the time of the burn.
What Happened: This colossal token burn was undertaken following the completion of the V2 token airdrop from the company's reserves.
The decision was driven by an aim to alleviate fears regarding a potential "dump and exit" scenario.
Gala Games' team shed light on the company's token holdings in a recent blog post, stating, "The tokens we possess have been accrued as ecosystem rewards over the preceding years. Though their original purpose was to fund ecosystem expansion and curation, we acknowledge the perceived risk they pose to the project's overall tokenomics by many."
The gaming giant is confident this large-scale token incineration will ease the apprehensions of token holders who fear a drastic drop in the token's price due to a potential mass sell-off by the company.
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Why It Matters: Outlining its rationale behind the burn, Gala Games stated the company had already earmarked 2 billion GALA tokens for destruction as part of its "2023 Vision Paper."
Another 3.96 billion tokens were incinerated, equivalent to the total revenue ever generated by Gala Games in GALA tokens.
The most significant token destruction, accounting for 15 billion tokens, was carried out in response to the community's fears of the mentioned "dump and exit" scenario.
The company provided transaction details on the Ethereum (CRYPTO: ETH) network for each segment of the overall token burn, estimating the destroyed tokens to be worth $660 million.
According to CoinGecko data, the tokens' collective value was around $637 million at the time of their burn.
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Photo: roegger from Pixabay
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