Shiba Inu, a meme coin known in the crypto space, features the Japanese-bred hunting dog as its mascot. Shiba Inu is often compared to Dogecoin and there are claims by its proponents that it has the potential to surpass Dogecoin’s popularity.
In August 2020, an individual or group known as Ryoshi introduced the meme coin, Shiba Inu. It was launched with a total of 1 quadrillion coins (equivalent to 1,000 trillion). Since then, this entity has been striving to burn these coins in an effort to increase their value within the cryptocurrency market.
What Is Crypto Token Burning?
The process of “burning” crypto involves permanently removing a specific amount of tokens or coins from circulation. To achieve this, the tokens are sent to a designated “burn address” where they become inaccessible and cannot be used further. This effectively decreases the overall supply of the token. For those who are unfamiliar with the concept, a burn address refers to a wallet address that lacks a known private key, and it is not owned or accessible by anyone.
Why Are Tokens Burned?
Cryptocurrency projects engage in the seemingly counterintuitive act of destroying their tokens for several reasons, each serving a unique purpose.
- Firstly, burning tokens creates scarcity by decreasing the number of available tokens. This scarcity increases the rarity of the remaining tokens.
- Secondly, token burning helps maintain a stable and predictable inflation rate within the cryptocurrency ecosystem.
- And finally, burning tokens can drive up demand for them, potentially increasing the value of the remaining tokens.
How Does SHIB Burn Work?
The mechanism for burning SHIB tokens, known as the Shiba Inu burn, involves the process of eliminating these tokens from circulation. This is accomplished through manual burns and an automatic mechanism seamlessly integrated into the Shibarium network, which serves as Shiba Inu’s blockchain.
In the world of cryptocurrency, there are two methods to reduce token circulation: manual burn and automatic burn. Manual burn involves intentionally removing tokens by sending them to a designated “burn address.”
On the other hand, automatic burn is a more complete process tied directly to the network’s transactions. Commonly referred to as implicit burn, this method utilizes a percentage of the transaction fee’s base gas fee for burning SHIB tokens. As each transaction occurs, the total supply of SHIB gradually diminishes, resulting in an intrinsic burn rate that persists as long as network activity remains active.
Why Are SHIB Tokens Burned?
Shiba Inu coin burning is crucial in achieving scarcity amidst the vast number of SHIB tokens in circulation. By burning more tokens, the supply gradually decreases, which theoretically exerts upward pressure on the remaining tokens’ value. Consequently, this process has the potential to attract additional investors and speculators, further fueling demand for SHIB.
Moreover, maintaining a controlled rate at which Shiba Inu tokens are burned plays a vital role in ensuring the long-term sustainability of SHIB. This measure effectively prevents excessive inflation that may occur as more tokens are generated or distributed.
Shiba Inu Token Burn Mechanism
Unlike many protocols, SHIB tokens do not have a formal mechanism for burning. The burn rate of Shiba Inu is entirely driven by the community. Consequently, there are numerous creative methods for token holders to burn tokens without sacrificing their own. Some examples of these methods include:
Typically, individuals engage in various services such as streaming music or utilizing search engines. The providers of these services have the opportunity to generate ad revenue and consequently burn SHIB tokens. As a result, users can enjoy activities like gaming, listening to music, watching YouTube videos, or purchasing merchandise to initiate the burning process of SHIB tokens.
Where Do Burnt SHIBs Go?
The SHIB burn mechanism revolves around specific wallet addresses responsible for storing the burned tokens. Currently, three SHIB burn addresses are actively burning SHIB tokens. It’s worth noting that the Shiba Inu development team did not create these addresses; instead, they are part of Ethereum and serve a similar purpose for other tokens as well.
One of the most frequently utilized burn addresses is “One.” This particular address holds significance as it was utilized by Ethereum’s co-founder, Vitalik Buterin, in May 2021 to burn SHIB tokens valued at $6.7 billion. The Shiba Inu team uses another important address for ShibaSwap listings. Lastly, there is an address known as the “Black Hole,” which is associated with the Ethereum genesis address.
What Is Shiba Inu Burn Rate?
The burn rate of the Shiba Inu determines the reduction in the circulation of SHIB tokens. A higher burn rate results in more tokens being destroyed, while a lower burn rate leads to fewer tokens being destroyed.
Investors and traders closely monitor the burn rate of Shiba Inu as it has a significant impact on their trading strategies. A high burn rate indicates strong community support, which boosts investor confidence and attracts more interest in SHIB. Conversely, a sudden increase in burning may lead to speculation regarding the token’s future performance.
What Is The SHIB Burn Tracker?
All the SHIB burn transactions are transparent and can be tracked on the Ethereum blockchain. SHIB burn trackers Shibburn, and Shiba Burn Tracker are websites that provide real-time SHIB burn transaction records. These records include the burn addresses, token amount, and timestamps.
Shibburn provides users with comprehensive information regarding the Shiba Inu supply, burn rate, quantity of burnt SHIB tokens over the past 24 hours, and the latest burn transactions. On the other hand, the Shiba Burn Tracker offers a visual representation displaying SHIB burn transactions from the last 30 days. It also includes tabs that present current and previous months’ SHIB burn statistics and a monthly breakdown of all SHIB burn transactions dating back to its inception.
Does Burning SHIB Increase Value?
The burning mechanism of SHIB has significant implications for its holders. Primarily, the process of burning gradually reduces the total supply of SHIB. Theoretically, this reduction could potentially increase the value of the remaining tokens if demand remains constant or increases.
Additionally, the SHIB token within the Layer 2 Shibarium network gains further value through its automated burning mechanism. By linking the burn process to network transactions, the system creates a natural incentive for user activity, thereby fostering the circulation and usefulness of SHIB tokens.
It is important to note that the burn mechanism, introduced as a deflationary pressure, can safeguard against inflation. This is a concern often observed in traditional fiat currencies. Therefore, the burn mechanism impacts the value of the token and contributes to the overall stability and sustainability of the Shiba Inu ecosystem.
Tokenomics Of Shiba Inu
The initial supply of SHIB was set at one quadrillion tokens during its launch. In a unique strategic move, the creator, known as “Ryoshi,” distributed half of the tokens to Ethereum’s creator, Vitalik Buterin, while locking the remaining half on Uniswap. This approach aimed to promote decentralization and prevent individuals from acquiring a controlling stake. Shiba Inu’s tokenomics stands out due to its significant initial supply and periodic burning of tokens, distinguishing it from other cryptocurrencies.
Shiba Inu Burn Rate And Coin Burn Schedule
There is no formal schedule for burning SHIB. However, the Shib community has maintained a consistent average of around 21 daily burns, totaling slightly over a quarter million tokens as of March 2023. This practice contributes to the Shib community’s reputation for garnering a strong following.
Shiba Inu’s Three-Token System
The ecosystem of Shiba Inu revolves around three tokens: SHIB, LEASH, and BONE. Each token fulfills a distinct purpose within the ecosystem.
SHIB: The Shiba Inu token, often called the “Dogecoin Killer,” serves as the foundational token of its ecosystem. With its sizable supply and affordable price, it presents an enticing option for investors seeking accessible tokens.
LEASH: The decision to link Dogecoin’s price with a rebase feature was initially planned but later reversed. It’s important to note that LEASH, unlike SHIB, has a limited supply of only 107,646 tokens, making it considerably scarcer.
BONE: BONE represents another token within the Shiba Inu ecosystem. Its details were recently revealed alongside the introduction of ShibaSwap, a decentralized exchange that belongs to the ecosystem. It serves various purposes within the ShibaSwap platform.
What’s The Benefit Of Burning Shiba Inu?
Many people may question the rationale behind burning their tokens instead of waiting for others to do so. However, by taking this action, it is possible to increase the value of your holdings once the supply diminishes. It is important to consider that there are numerous individuals who share the same perspective if everyone remains “hodling” without burning, achieving a goal of $0.01 SHIB becomes more difficult.
The goal is reached faster as more people burn their tokens. Additionally, users can earn passive income through the Shiba Inu burning portal. It eliminat the need to wait for future dates to reap the benefits. Burning SHIB presents numerous opportunities, with businesses and individuals generating revenue from token burning activities.
Token burns play a critical role in Shiba Inu’s strategic approach by aiming to enhance the token’s value and stabilize its price. This mechanism establishes a dynamic burn system that closely correlates the Shiba Inu burn rate with network activity, thereby exerting a significant influence on the token’s future worth and its position within the broader cryptocurrency ecosystem. The trajectory of Shiba Inu is intricately tied to the level of engagement exhibited by its user base through this burn-rate connected framework.