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- Shiba Inu’s burn rate increased by 340%, with over 11 million tokens removed from circulation in the last 24 hours.
- Despite the burn activity, Shibarium saw a decline in transactions, potentially affecting future token burns.
Shiba Inu, one of the most prominent memecoins, has experienced a slight price increase following a significant token burn activity orchestrated by its dedicated community. In the last 24 hours, Shiba Inu holders collectively burned over 11 million SHIB tokens, sending them to unspendable wallets.
According to data from Shibburn, a tracking service that monitors Shiba Inu token burning, the SHIB burn rate surged by 340. 27%. In total, seven transactions and 11,080,178 tokens were burnt to reduce the overall supply. The largest burn was recorded at 10,007,448 tokens and happened around nine hours prior to the last update. The rest of the burns were of lesser quantities, the largest one being 258,204 tokens while the least being 45,839 tokens.
Token Burns Aim to Boost SHIB Value Through Scarcity
Although the number of tokens burned is relatively low compared to the total supply of Shiba Inu, the frequency of burn events shows that the community remains dedicated to decreasing the token supply and, thus, possibly boosting its value through scarcity. At the moment, the Shiba Inu community has burned out 410.7 trillion tokens, and there are still 583 trillion tokens remaining.
The strategic token burn is a step that is in line with the overall efforts being made by the Shiba Inu community to deal with the problem of the large supply of SHIB tokens. The community plans to burn tokens, which means to reduce their number on the market, thus theoretically increasing the coin’s value as demand rises and supply is limited. This approach can be related to simple supply-side economics, assuming that a decrease in supply and stable or increasing demand leads to an increase in the value of the asset.
Shibarium Transactions Decline Despite Increased Burn Activity
Even with the increase in the burn rate, the activities on Shibarium, the layer-2 blockchain solution for Shiba Inu, have been decreasing. In the past month, the daily transactions on Shibarium have decreased drastically. On August 20, 2023, the platform completed 28,600 transactions. However, according to the latest reports, this figure has dropped to 3,810, a decrease from 5,430 transactions the previous day.
Shibarium plays a crucial role in Shiba Inu’s ecosystem. Part of the gas fees paid on the platform in BONE tokens is converted into SHIB and then burned. This mechanism connects the number of transactions that occur on Shibarium with the burning rate of SHIB. Shibarium’s activity may also be affected in a negative way, which could have consequences on the burning rate of SHIB tokens.
It is worth noting that in the last quarter of 2023 and into early 2024, the Shiba Inu team burned billions of tokens following updates to the layer-2 blockchain. The recent decline in Shibarium transactions may slow this burn rate unless transaction volumes increase. The recent burn activity has had a slight positive effect on Shiba Inu’s price. Following the burn update, the price of SHIB increased by 2.31%, reaching $0.00001359.
