Uniswap’s founder, Hayden Adams, made a surprising move on October 20 by burning a staggering 99% of the HayCoin (HAY) supply, as announced on X (formerly Twitter).
This drastic measure was taken in response to growing concerns about excessive price speculation surrounding the token in recent days, which had seen its value skyrocket.
Adams initially deployed the HAY token for testing purposes five years ago, well before the launch of the decentralized Uniswap protocol.
At that time, he had created a small test liquidity pool with only a minuscule fraction of the total HAY supply, retaining over 99.9% of the tokens in his wallet.
However, in a surprising turn of events, HAY had recently been trading at astronomical six-figure prices, largely resembling the behavior of meme coins.
Adams expressed his astonishment, stating, “Over the years, a few people have noticed it and bought it as a joke or for the novelty of it.
I was extremely surprised to see people buying and selling significant dollar amounts this past week, treating it like a memecoin. Crypto can be weird sometimes.”
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According to Adams’ post, he burned approximately $650 billion worth of HAY tokens, branding the price speculation as “silly.”
He expressed his discomfort with owning almost the entire supply of a token that had become the subject of memes and speculation, which ultimately led him to burn the entire amount in his wallet.
Token burning is a process that permanently removes tokens from circulation, but it can also have inflationary effects on their price by reducing the available supply.
At the time of writing, the HAY token was trading at $2,392,640, reflecting a remarkable surge of over 235% in the past 24 hours, according to CoinGecko.
However, Hayden Adams’ decision to burn the tokens did raise some eyebrows on X. In addition to its impact on the HAY price, some users pointed out the potential tax implications of such a move.
One user speculated, “Assuming a cost basis of $0, a ~$650 billion disposal gives rise to ~$128 billion long-term capital gains liability.”
Others suggested that Adams could have sold the tokens before burning them and donated the profits to a charitable cause.
In conclusion, Hayden Adams’ decision to burn 99% of the HAY token supply was driven by concerns about price speculation, making a significant impact on the cryptocurrency market and prompting discussions about the tax implications of such actions.
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