On Monday, April 17, 2023, at block number 119,750,400, South Korean blockchain company Klaytn will burn about half of its supply of Klay tokens. Around midnight on that day, Singapore time, these tokens would be destroyed.

The 5.281 billion tokens that will be burnt are part of Klaytn’s 7.281 billion Klay reserve, which was created at the company’s mainnet launch in 2019 to pay for the development of its ecosystem.

Future ecosystem opportunities will be funded using the 2 billion tokens that are still in the reserve. If the aforementioned opportunities are not secured, these will also be burned in three years.

The value of the tokens that will be destroyed on Monday, valued at their present prices, is US$1.3 billion.

According to Sam Sangmin Seo, head of the Klaytn Foundation and one of its three representative directors, the reserve percentage in comparison with the total circulating supply of Klay was excessive when compared to other blockchains.

By issuing more tokens, he continued, the team wanted to eliminate the potential risk of “shocking the market”.  He also disclosed that potential investors and developers were particularly concerned that the reserve percentage was too high.

Early last year, Klaytn rebranded as it revealed intentions for international growth and a new goal of becoming the blockchain of choice for metaverse and game makers.

Klaytn leaves the Kakao incubator

The initial announcement of the token burn was made on March 14 in South Korea. The Klaytn Foundation also made the official statement that it was leaving Krust Universe, a division of internet giant Kakao that serves as an incubator for initiatives with the potential to gain international traction. Incorporated in Singapore in 2021 were Krust Universe and Klaytn Foundation.

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