Stellar Feedback Loop has changed their giveaway strategy.

5,000 STR – link with legit, non-spammy Facebook account.
1,000 STR – verify email address.
1,000 STR – send 1,000 STR to any other account.

Total: 7,000 STR.

Current exchange rates indicate a price of roughly $3.20 per 1,000 STR, so the value of a new user’s free account was $22.40.

Their new giveaway is not only staggered, but also amount-adjusted such that each user gets about $10 worth of stellars. At the exchange I indicated above, that means roughly 3,125 stellars per user, or about half what they were getting before.

As the amount they give out decreases, fewer stellars are available on the markets. That creates a positive feedback loop, due to supply and demand: since fewer stellars are being distributed, the price will increase. Because the price increases, even fewer stellars will be distributed.

At the Stellar organization’s original giveaway rate, they were on track to disburse all 50 billion allocated stellars upon reaching 10 million users. But now that they’re adjusting the rate, they may afford to fund more than 10 million people.

The feedback loop also works in reverse. A falling price will lead to more stellars being distributed, which will increase supply and, potentially, cause the price to fall further.

So I have two questions:

1) Will this new policy cause the stellar price to rise, or fall?

2) Will this new policy cause the stellar price to be more volatile, or more stable?

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