Stellar (XLM) has quietly undergone one of the most significant behind-the-scenes transformations in the cryptocurrency space—over 22.5 billion XLM have been effectively neutralized from circulation due to a long-hidden protocol bug. Meanwhile, a new 10 billion XLM incentive campaign with Coinbase is fueling fresh interest in the network. But what does this mean for XLM’s price, supply integrity, and long-term vision?
This article dives deep into the hidden inflation incident, Stellar’s silent correction strategy, and the recent educational initiative with Coinbase—all while exploring whether these moves signal a strategic revival or simply damage control.
The Hidden Inflation Bug That Shook Stellar
In April 2017, an obscure flaw in Stellar’s blockchain protocol—specifically within the MergeOPFrame::doApply function—allowed an attacker to generate 22.5 billion unauthorized XLM tokens. At the time, this amount was worth approximately $10 million and represented nearly 25% of XLM’s then-circulating supply, creating a massive, undetected inflation event.
The vulnerability went unnoticed for years until researchers at Messari, a leading crypto analytics firm, uncovered the anomaly. Their investigation revealed that the maliciously minted tokens were gradually funneled into exchanges and likely sold during the first half of 2017—a period when XLM saw notable price increases.
This unauthorized issuance diluted the value of legitimate holdings. To illustrate: if your XLM was worth $1.25 before the event, its effective value could have dropped to $1.00 due to sudden inflation, even if the market price didn’t immediately reflect it.
Stellar Development Foundation (SDF) had prior knowledge of the exploit. According to a private statement shared with Messari before public disclosure, SDF acknowledged the bug and confirmed it had been referenced twice in internal protocol notes. Despite this awareness, no public announcement was made at the time.
Silent Correction: Burning Billions to Restore Trust
To counteract the inflationary damage and preserve the integrity of XLM’s total supply, SDF initiated a token burn program—quietly removing the illegitimate XLM from circulation. While official updates on the progress remain scarce, evidence suggests the cleanup is ongoing.
This silent approach raises questions:
- Why wasn’t the community informed earlier?
- Could transparency have prevented confusion or panic?
- How close is Stellar to fully resolving the issue?
SDF has committed to publishing a full audit of all SDF-held XLM by the end of 2025, which will include detailed insights into the bug, its exploitation, and the burn process. Until then, investors must rely on third-party analysis and indirect signals from on-chain activity.
What’s clear is that Stellar prioritized network stability over publicity, opting for a measured response rather than a potentially volatile public admission.
👉 See how transparent tokenomics can protect your investments in volatile crypto markets.
Coinbase Earn Returns: 10 Billion XLM Up for Grabs
While cleaning up past issues, Stellar is also pushing forward with bold new initiatives. In partnership with Coinbase, one of the largest crypto platforms globally, Stellar has launched a revamped Coinbase Earn campaign—this time entirely focused on XLM.
Dubbed “Learn & Earn,” the program incentivizes users to educate themselves about blockchain technology and Stellar’s ecosystem by offering real XLM rewards:
- Complete one short video lesson → Earn $2 worth of XLM
- Invite up to 4 friends; each completes a lesson → Earn $10 per friend
- Maximum reward per user: $50 in XLM
With 10 billion XLM allocated—100% dedicated to user rewards—this campaign isn’t just marketing; it’s a strategic push to grow financial literacy, expand user adoption, and strengthen ecosystem engagement.
Compared to traditional airdrops or speculative giveaways, this model promotes meaningful interaction. Users don’t just receive tokens—they learn about decentralized finance, cross-border payments, and how Stellar enables fast, low-cost transactions worldwide.
Given that Coinbase Earn previously boosted interest in projects like Ethereum and Chainlink, this collaboration could significantly elevate XLM’s visibility—especially among retail investors new to crypto.
Market Reaction: Is XLM Poised for Growth?
At the time of writing, XLM trades around $0.107, showing a 24-hour gain of 1.3%. It currently ranks as the 8th largest cryptocurrency by market capitalization, reflecting strong investor confidence despite past challenges.
Several factors support potential upside:
- Reduced circulating supply from the burn improves scarcity.
- Increased utility awareness through Coinbase’s educational push.
- Growing institutional trust due to SDF’s responsible handling of crises.
However, price movements depend not just on fundamentals but on market sentiment, macroeconomic trends, and broader crypto adoption cycles.
Still, Stellar’s dual focus—correcting historical flaws while investing in future growth—demonstrates maturity rarely seen in early-stage blockchain projects.
Core Keywords Identified:
- Stellar (XLM)
- XLM price
- Token burn
- Coinbase Earn
- Learn and earn crypto
- Blockchain education
- Cryptocurrency inflation
- Stellar Development Foundation
These keywords naturally appear throughout the narrative, supporting SEO performance without compromising readability.
Frequently Asked Questions (FAQ)
Q: How many XLM were destroyed due to the bug?
A: Approximately 22.5 billion XLM were invalidated through a burn process after being illegally generated via a protocol vulnerability in 2017.
Q: Is the XLM burn process complete?
A: The Stellar Development Foundation has not confirmed completion. A full audit is expected by the end of 2025, which will provide definitive details.
Q: Can anyone participate in the Coinbase Earn XLM campaign?
A: Yes, but availability may vary by region. Users must complete identity verification on Coinbase and finish educational modules to earn rewards.
Q: Why didn’t Stellar announce the bug earlier?
A: SDF likely aimed to avoid market panic and ensure a stable resolution before going public. Full transparency is expected with the upcoming audit.
Q: Does burning XLM increase its price?
A: Not directly, but reducing supply while demand remains constant or grows can create upward price pressure over time.
Q: What is the purpose of the Coinbase “Learn & Earn” program?
A: To promote blockchain education while distributing XLM tokens to engaged users, fostering long-term adoption rather than short-term speculation.
👉 Start earning crypto while learning about blockchain—join the next-gen financial revolution today.
Conclusion: Redemption or Reinvention?
Stellar stands at a pivotal moment. Once shadowed by a silent inflation crisis, it’s now emerging with greater accountability and strategic vision. The quiet removal of 22.5 billion rogue XLM tokens reflects a commitment to integrity, while the ambitious Coinbase partnership signals confidence in mass adoption.
Whether this marks a full comeback or just a step toward redemption depends on how well Stellar continues to balance transparency, education, and innovation. For investors and users alike, the message is clear: Stellar isn’t just fixing its past—it’s building a more resilient future.
With strong fundamentals, reduced supply pressure, and growing ecosystem momentum, XLM may be quietly positioning itself for renewed relevance in the evolving digital asset landscape.