TL;DR
- SHIB’s price fell 26% in 30 days, with a 90% decrease in its burn rate, hinting at potential further declines.
- Shibarium also introduced a burning mechanism which differs from the original one.
Another Worrying Sign
The second-largest meme coin has underperformed lately, with its price falling by approximately 26% on a 30-day scale. Its market capitalization slipped under $8 billion, making Shiba Inu (SHIB) the 16th-largest cryptocurrency.
Some important indicators hint that the downfall may intensify in the near future. One example is the burn rate, which has plummeted by more than 90% weekly, resulting in less than 13 million tokens sent to a null address.
The burning mechanism’s ultimate goal is to reduce the tremendous circulating supply of SHIB, making it scarcer and potentially more valuable in time. A key factor for such a price rally is the level of demand, which needs to stay the same or rise (as fundamental principles of economics dictate).
Over the past few years, Shiba Inu’s team has burned over 41% of the initial supply. The circulating supply currently stands at around 583 trillion tokens.
Other worrying signs that may be interpreted as bad news for SHIB bulls include the declining Net Network Growth and the reduced whale activity.
Shibarium’s Latest Upgrade
Speaking of the burning program, it is worth mentioning that Shiba Inu’s layer-2 scaling solution also launched a similar initiative. As CryptoPotato reported, the team introduced a designated “Burn Portal.”
The burning mechanisms of SHIB and its L2 network are both aimed at reducing the overall supply of tokens but operate rather differently.
The original Shiba Inu burn program relies heavily on community initiatives and manual burns. Holders of the meme coin can voluntarily send coins to a particular null address, a wallet from which the tokens cannot be retrieved, effectively removing them from circulation.
In the Shibarium ecosystem, BONE is the governance token that plays a crucial role, particularly for validators and delegators within the network. The coin is used to pay for gas fees, and those interacting with the L2 scaling solution would need BONE to cover these costs.
The burning of SHIB on Shibarium is linked to the transaction fees. A portion of the costs, paid in BONE, is used to buy Shiba Inu tokens, which are then sent to a null address. Once there are enough BONE tokens, users will be able to initiate a burn. For now, they need at least 100 BONE tokens.
For more updates on the ecosystem, make sure to check out our Shibarium news.
