Stellar to Auction off Coins To Cover Expenses

Stellar will be auctioning off units of its currency (STR) starting March 16 in order to raise funds to cover

Stellar will be auctioning off units of its currency (STR) starting March 16 in order to raise funds to cover operating expenses.

The auction will be held on the “Stellar internal distributed exchange”, via Haste.co.nz, an early Stellar gateway and registered Financial Services Provider in New Zealand.

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Stellar said that the amount auctioned will be no greater than that needed to cover its expenses. The opening price will be based on STR’s 30-day trailing average. Once the auction is under way, participants will be able to specify their desired amounts and prices.

The advent of auctions as a way of selling digital currencies makes for an interesting price dynamic. The US Marshals have held a series of auctions to liquidate the bitcoins from Silk Road and its convicted operator Ross Ulbricht, raising millions. As bitcoins are already traded on order book-driven marketplaces, their auction in another venue can lead to price divergence due to the lead times necessary for the auction process.

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Stellar’s highest volume venues are currently BTC38 and Poloniex.

Stellar employees, consultants or board members are ineligible for the auction.

According to unaudited 2014 financial statements, quarterly expenses have grown to over $700,000, roughly half of which is for payroll.

Stellar made the disclaimer that like all digital currencies, there are no guarantees as to its value, which it says can fall to zero. New stellars are generated at an annual rate of 1%.

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