This week, Gala Games revealed that it has "burned" nearly 21 billion GALA tokens—valued at over $637 million at the time of the burn—from its own reserves. This action follows the completion of its V2 token airdrop and is aimed at allaying fears of a potential "dump and exit" situation.
The Gala Games team stated in a blog post, "The tokens we possess have been awarded as ecosystem rewards over several years. Though they were always meant to fuel the growth and nurture the ecosystem, we are aware that many see them as a significant risk to the project's overall tokenomics."
Gala Games is confident that this large-scale token burn will help alleviate the concerns of holders who might be apprehensive about the company selling off a significant amount of its token—a move that could trigger a price drop.
The company outlined its token burn strategy in the blog post. It had already planned to burn 2 billion GALA tokens as part of its "2023 Vision Paper" for the year. Subsequently, it incinerated another 3.96 billion tokens, which Gala Games equated to the total revenue it has ever earned in GALA.
The most significant burn, comprising 15 billion tokens, is Gala's answer to community worries about the aforementioned "dump and exit" scenario. Gala directed readers to on-chain Ethereum network transactions for each stage of the overall token burn, claiming it represented $660 million worth of tokens. However, CoinGecko data suggests the tokens were collectively valued at approximately $637 million at the time of the burn.
Brink announced on Wednesday that nearly 160,000 unique wallets had received upgraded tokens as the company concludes the contract upgrade and phases out its old token.
Earlier this month, Brink confirmed that Gala is distributing new GALA "V2" tokens to holders of GALA "V1" tokens. This action is due to several technical enhancements enabled by a reissue of the token. However, major U.S. cryptocurrency exchange Coinbase publicized that it wouldn't support or facilitate the Gala V2 airdrop without providing a specific reason.
