Hayden Adams, a decentralized crypto exchange (DEX) Uniswap founder, made waves in the crypto community by burning nearly the entire HayCoin (HAY) supply on October 20th. This drastic move aims to end wild price speculation that had recently been surrounding the token.
Five years ago, well before Uniswap became a decentralized trading protocol, Adams initiated the HayCoin project for testing purposes.
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He generated a modest liquidity pool and stored over 99.9% of HAY tokens in his wallet. Although created merely as a test, the token unexpectedly became the subject of significant trading and speculation a few weeks ago.
Adams voiced his surprise in a post on X (formerly Twitter):
Over the years, a few people have noticed it and bought it as a joke/for the novelty of it. 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.
The Uniswap founder destroyed a staggering $650 billion worth of HAY tokens, citing discomfort with the unexpected speculative frenzy. He said:
Ultimately, I’m uncomfortable owning almost the entire supply (~99.99%) of a token that people are memeing and speculating on, so I decided to burn the full amount in my wallet (”valued” at an absurd ~$650b).
When tokens are burned, they're permanently erased from circulation, often resulting in inflationary price impacts. Indeed, the value of remaining HAY tokens shot up over 235% within 24 hours after the burning, reaching a trading value of $2,392,640.
This drastic action sparked various reactions on X, including debates about the tax implications of such a large-scale token burn. One user noted:
Assuming a cost basis of $0, a ~$650 billion disposal gives rise to ~$128 billion long-term capital gains liability.
Others suggested that rather than burning the tokens, Adams could have sold them and then donated the proceeds.
Hayden Adams' decision to burn almost the entire supply of HayCoin has elicited mixed reactions and triggered considerable debate, including tax considerations. While it successfully checked the token's speculative trading, it also inflated its price, illustrating the complexities inherent in crypto asset management.
