(iexclusivenews) – HAY is a token that was created by Hayden Adams, the founder of Uniswap, a popular decentralized exchange protocol.
HAY was not meant to be a serious project, but rather a test token that Adams deployed five years ago, before Uniswap was launched.
He created a small liquidity pool with a tiny fraction of the total supply and kept over 99.9% of HAY tokens in his wallet.
However, in the past few weeks, HAY became a target of speculation and meme trading, reaching astronomical prices in the six-figure range.
According to CoinGecko, HAY was trading at over $2 million per token on Oct. 20. Adams was surprised and uncomfortable by this development, as he explained in a post on X (formerly Twitter):
Five years ago, before the launch of Uniswap v1, I deployed a token called HayCoin to use for testing. This was back when gas was so cheap that mainnet could be used as as a testnet. After the launch of v1, I created a small test liquidity pool with a tiny fraction of the total…
— hayden.eth 🦄 (@haydenzadams) October 20, 2023
“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.”
To put an end to this “silly” situation, Hayden Adams decided to burn the full amount of HAY tokens in his wallet, which was valued at an absurd $650 billion at the time of burning.
Burning means permanently removing tokens from circulation, which reduces the supply and increases the scarcity.
However, in this case, Adams did not intend to boost the price of HAY, but rather to dissociate himself from the token and its speculation.
“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).”
What are the implications of burning HAY tokens?
Adams’ move had several implications for the HAY token and its holders. First of all, it did not stop the price from rising further.
In fact, HAY surged by over 235% in the past 24 hours, reaching over $2.3 million per token at the time of writing.
This shows that there is still demand for the token, despite its lack of utility or purpose.
Secondly, it raised some legal and tax issues for Adams and other HAY holders.
Some users on X pointed out that burning tokens could be considered a taxable event, as it implies disposing of an asset with a high value.
One user calculated that Adams could owe about $128 billion in long-term capital gains tax, assuming a cost basis of zero.
However, this depends on how the tax authorities treat crypto assets and transactions.
Thirdly, it sparked some ethical and moral debates among the crypto community.
Some users suggested that Adams could have sold the tokens before burning them and donated the profits to charity or other causes.
Others argued that burning was a better option, as selling would have caused more speculation and volatility in the market.
What does this mean for Uniswap and crypto?
The HAY token burning incident is an example of how crypto can be weird sometimes, as Adams said.
It shows how some tokens can gain value and popularity without any intrinsic merit or functionality, just because of hype and memes.
It also shows how some crypto founders can have a lot of power and influence over their projects and tokens, even if they do not intend to.
However, this does not mean that Uniswap or crypto are not serious or legitimate endeavors.
Uniswap is one of the most successful and innovative decentralized protocols in the crypto space, facilitating billions of dollars worth of trades every day.
Crypto is a revolutionary technology that enables new forms of money, governance, and social interaction.
The HAY token burning incident is just a reminder that crypto can also be fun and unpredictable sometimes.
And that we should always do our own research before investing in any token or project.
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