Explore the impact of Shibarium on the burn rate of Shiba Inu’s SHIB cryptocurrency.
Ryoshi launched Shiba Inu as a meme coin in August 2020. It is hard to determine a core factor behind its success, but one can certainly pinpoint the community’s support in its growth over four years.
SHIB, as a cryptocurrency, has now reached a value of $0.00001832, up by 1.85% in the last 24 hours, with a market cap of approximately $10.80 billion at the time of writing this article. It is the second-ranked meme coin and the 13th-ranked cryptocurrency worldwide.
Shiba Inu launched Shibarium in 2023 to enhance the speed and reduce the cost of transactions. It is a layer-2 solution that can improve Shiba Inu’s ecosystem. Its potential impact on the price of the token is relative, with many believing that it has instilled a sense of confidence and, hence, triggered a new uptick in SHIB. Others remain dubious, citing that more factors could have helped.
Understanding SHIB’s Burn Mechanism
SHIB’s burning mechanism entails sending a portion of the circulating supply to a wallet address that nobody can access. Thereby permanently removing those tokens from circulation to bring down the number. The idea is to boost prices and counteract inflationary pressures. Every crypto burning mechanism functions similarly.
In this instance, a token-burning mechanism is essential to increase scarcity for a token, SHIB. The ongoing burn rate per ShibBurn is up by 7911.12%. A total of 410,731,181,056,899 Shiba Inu tokens have been burned from the initial supply. Almost 7,203,738 tokens burned 4 hours ago from the time of drafting this piece. More 4,257,021 Shiba Inu tokens are registered to have been burned within 6-7 hours before that.
SHIB’s prices have reacted positively so far, surging by 5.98% in the last seven days. Bullish speculation is also visible in the SHIB price prediction. It projects that the token can reach $0.0000279 by the end of this year.
How Can Shibarium Increase the SHIB Burn Rate?
Shibarium can increase the burn rate of SHIB via an automatic burning mechanism. It would operate on top of a manually burning mechanism, completing the structure where dApps can strategically reduce tokens in circulation. Shibarium facilitates fee generation, which divides into priority and base fees.
The platform converts almost 70% of the base fees into burns through a process that takes shape in BONE to $25,000. It then transfers to the Ethereum L1 solution for conversion to SHIB and further burning.
Shibarium can boost transaction volume, which further aims to help a larger number of trades and/or exchanges within the ecosystem on the network. The higher the volume, the more tokens the automatic system burns.
Token Scarcity and Its Potential Impact on SHIB’s Price
The relation between token scarcity and SHIB’s price is that of demand and supply. Scarcity translates to less supply, eventually leading to a higher price as the demand rises.
Constant burning of SHIB can lead to price appreciation over time as more tokens burn in the future. Besides, demand is only likely to soar amid the growing adoption of cryptocurrencies and blockchain technology.
The concept universally applies to every cryptocurrency and, to every extent, to other products and services.
Shibarium’s Role in SHIB’s Long-Term Vision
Shiba Inu’s mission is to move beyond the basic usage of a meme coin with higher utility. Shibarium stands to that mission statement by bringing a lot of elements to the table. For example, it introduces PoS security along with seamless integration with projects that are based on Ethereum. Moreover, external factors such as market trends and the overall SHIB ecosystem are key considerations in shaping Shiba Inu’s future.
It further includes factors like SHI (a stablecoin), Shibaswap (DEX), and Shib the metaverse, to mention a few.
Conclusion
Shibarium has the potential to affect the burn rate of Shiba Inu’s token, SHIB. It possesses the capability to facilitate higher transaction volume and, hence, burning of a larger number of tokens. It fits the long-term prospects by exploring utility beyond that of a basic meme coin.
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