Binance is to offer a massive 9.5 million XLM airdrop, worth $855,000, to token holders after discovering that it had been “unknowingly” earning rewards for staking the token for almost a year. XLM is a Proof-of-Stake token, which means that holders are paid for simply holding the token, which anyone who has held XLM on the Binance platform has unwittingly been doing, with Binance getting the rewards. Since the staking mechanism was unintentionally implemented into the Binance platform in August 2018 the company has racked up the enormous amount of tokens, which it has decided to distribute among XLM holders.
— Binance (@binance) July 18, 2019
Staking to Start Tomorrow
Binance will begin official XLM staking tomorrow and has come up with a plan to distribute the already earned tokens, starting with a 40-day snapshot of XLM balances:
…on September 1, Binancians who staked XLM tokens (from July 20) will get a bundled bonus payment of XLM staking rewards, including the regular monthly staking reward from the 40-day period and the one-time distribution of 9,500,000 XLM shared proportionately among Binance users, which is estimated to be worth 10 to 12 months of typical monthly rewards.
The announcement brought an 11% jump in the XLM price following a two-month selloff that has seen the token lose 50% of its value. Whether the upcoming airdrop has the capacity to arrest that slump or simply proves to be a temporary boost only time will tell. Seeing as the price of the token is critical to the success of the staking program, an extra-keen eye will be kept on any changes in the value of XLM. The token reached $0.87 in January 2018, since when it has lost 91% of its value and retraced any pump it has enjoyed in the past seventeen months.
Critics Point to Potential Losses
Not everyone was thrilled with the idea of the staking program, with critics pointing to the potential loss of earnings that holders could incur and the perceived unfairness towards holders from 2018 and American users:
This could be a horrible idea. As my picture shows, $5000 staked in XLM will currently earn you $4 per month. Even with @Binance airdrop, that’s $40 for holding 30 days.
But if XLM loses just 15% of its value in that time, you’ll lose $750.
No Thanks pic.twitter.com/GbNuRMJ1JM
— M∆TTHEW Ð. EGEŁKR∆UT ☧ (@MattEgelkraut) July 18, 2019
Does anyone think it is fair for those who were holding their XLM in binance for a long time to lose against the big guys going all in now to have a better share of the pool?
— Chan Bonita (@Chanbonitaa) July 18, 2019
Very thoughtful to start distributing them the exact day US customers officially can’t use Binance anymore to trade. 🤔
— TheGreenMachine (@TheGr33nMach1ne) July 18, 2019