Gala Games burns nearly 21 billion GALA tokens worth $637 million

What’s new? On May 16, Gala Games, a game studio, burned almost 21 billion GALA tokens from its own reserves, worth about $637 million at the time. The burning followed the airdrop of a new version of the asset. Gala Games thus decided to reduce the users’ anxiety due to the potential possibility of dumping the asset by the studio itself, which could lead to a decrease in its value. The destroyed tokens were received by the studio as rewards within the ecosystem over several years, it was assumed that they would be used to support the project. “Many people see them as a fundamental risk to the overall tokenomics of the project,” the company explained its reasons for burning them.

Gala Games Blog

What else does the blog say? In addition to being burned as part of the 2023 plan, the overwhelming number of coins in the company’s account (15 billion) was destroyed solely for the purpose “to fully neutralize the ‘dump and exit’ scenario.” In this form of fraud, the developers of the project, who own a significant number of tokens, arrange a massive sell-off, which leads to the collapse of the asset and losses among investors. The team explained that it would not be able to do an exit scam by burning most of its reserves in GALA and not having tokens to dump.

The team noted that it still owns several wallets for operational expenses and transaction fees on the OpenSea NFT marketplace, but no longer controls much of the GALA supply. It has also created a wallet with a strategic reserve of 2 billion GALA. The public and multi-signature-protected address “is a testament to our long-term commitment” to the community.

Gala’s President of Blockchain Jason Brink said in a comment to Decrypt that if the ecosystem is sustainable, the company will be able to generate revenue from rewards within the ecosystem, which does not require having “a gigantic pile of GALA.”

On May 17, Brink said that 158 560 different wallets received the upgraded tokens as the company completes its contract renewal and withdraws the old GALA from circulation.

Just an update on the $GALA v2 upgrade. The upgraded $GALA has been received by 158,560 addresses, with 82,047 remaining. Every address with more than 315 $GALA has received their v2.— Jason Brink aka BitBender (@BitBenderBrink) May 17, 2023

Since last summer, Gala Studios’ blockchain games have been available on the Epic Games Store online service. On January 9, the studio announced a partnership with actors Dwayne Johnson and Mark Wahlberg for Gala Film and Gala Music projects, but soon deleted the announcement, causing GALA to drop by 22%. As of May 18, 10:40 UTC, the asset is trading at $0,03251, down by 3,93% overnight, according to Binance.

In March, the Huobi exchange announced a strategic partnership with Gala. The companies intend to cooperate in the investment and listing projects of the Gala platform.