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Hayden Adams, the mind behind Uniswap, made waves on October 20 when he decided to destroy nearly the entire supply of HayCoin (HAY). He revealed his decision through a post on X, the platform formerly known as Twitter. Adams cited growing concerns over the erratic price fluctuations of the token in recent times as the chief reason for his action.
The inception of HAY dates back five years when Adams was testing functionalities ahead of the Uniswap protocol's official launch. During this phase, he generated a modest liquidity pool while retaining a staggering 99.9% of all HAY tokens. These tokens resided in his personal wallet. Intriguingly, the token, which started as a low-key asset, began trading at surprisingly high prices recently.
Adams shared his astonishment at observing HAY's unforeseen rise to popularity. He mentioned how a few had initially bought it humorously or for its novelty factor. Yet, its surge as a high-stake trading token caught him off guard, with the token's behavior mirroring that of well-known memecoins.
Wanting to distance himself from the overwhelming speculation, Adams felt uneasy about being the sole holder of a large portion of HAY tokens. This discomfort led him to remove tokens equating to around $650 billion from the market. He expressed his move's intention was to distance his identity from a token that seemed to be gaining undue attention.
Token burning usually involves the permanent removal of tokens from active trading. This action can inadvertently lead to price surges due to a reduced number of available tokens. As of now, data from CoinGecko showcases the HAY token's price at $2,392,640, a 235% surge within a day.
However, Adams' decision sparked debates among X's users. Several questioned the implications of this move on taxation, suggesting potential tax liabilities.
A user even broke down the numbers, estimating a potential capital gains tax liability. Others opined that selling the tokens and using the proceeds for philanthropic purposes could have been a more impactful approach.
