In a surprising turn of events, Uniswap’s founder, Hayden Adams, executed a dramatic move on October 20 by incinerating a staggering 99% of the HayCoin (HAY) supply. This unprecedented action was spurred by his deep concerns regarding the rampant price speculation that had engulfed the token.
Before we delve into the details, it’s worth noting that Hayden Adams initially introduced the HAY token for testing purposes approximately five years ago. This was a precursor to the launch of the decentralized Uniswap protocol. At that time, he established a modest test liquidity pool, utilizing only a minuscule fraction of the overall token supply. Astonishingly, he retained over 99.9% of HAY tokens in his own wallet, a fact that would soon garner substantial attention.
Fast forward to just a few weeks ago, and the token was experiencing a meteoric rise in popularity, echoing the trend of meme coins. Hayden Adams himself reflected on this unexpected phenomenon, saying, “Over the years, a few people have noticed it and bought it as a joke or for the novelty of it. I was extremely surprised to see people buying and selling significant dollar amounts this past week, treating it like a meme coin. Crypto can be weird sometimes.”
In a bold move, Adams decided to address the situation head-on. He took action by burning a mind-boggling $650 billion worth of HAY tokens. His rationale for this dramatic step was straightforward: he found the relentless price speculation surrounding the token to be frivolous and, in his words, “silly.” He was resolute in his decision to disassociate his profile from the token. He declared, “Ultimately, I’m uncomfortable owning almost the entire supply (approximately 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 ~$650 billion).”
For those unfamiliar with token burning, it’s important to understand that this action permanently removes the tokens from circulation. Paradoxically, this can have inflationary effects on the token’s price, as it reduces the available supply. As of the moment of writing, the HAY token is trading at an astonishing $2,392,640, marking an impressive surge of over 235% in the past 24 hours, according to data from CoinGecko.
Notably, Adams’ bold move sparked considerable discussion on X (formerly Twitter). Aside from the immediate impact on the HAY token’s price, users pointed out that this token burning event could potentially have tax implications. One user highlighted, “Assuming a cost basis of $0, a ~$650 billion disposal gives rise to ~$128 billion long-term capital gains liability.” This observation raised eyebrows and generated further conversation.
Additionally, some members of the community suggested an alternative course of action for Adams. They proposed that he could have opted to sell the tokens before incinerating them and then donate the proceeds to a charitable cause, prompting a broader debate on the moral and financial implications of his decision.