How Does the Shiba Inu (SHIB) Burn? All the Information You Require About Shiba Burn Work

Shiba Inu’s approach to crypto burning is nothing short of radical, setting it apart in a landscape teeming with various token-burning mechanisms. The project has undertaken a relentless mission to obliterate more than 43% of its initial SHIB coin supply, a move that might seem counterintuitive at first glance. Who willingly destroys money, and why? Shiba Inu coin burning strategy aims to introduce an element of scarcity, transforming its tokens into a coveted asset. This deflationary model not only challenges traditional norms but also promises to enhance the token’s value over time. Far from mundane, Shiba Inu’s combustion mechanism unveils a unique narrative in the dynamic cryptoverse, providing enthusiasts with an intriguing glimpse into a strategy that defies the status quo.

What is a Token Burn?

Token burning, a strategic move in the crypto market, involves the intentional destruction of a specific quantity of coins, permanently reducing their circulation. The concept finds inspiration from the stock market’s common practice of repurchasing securities to reduce outstanding shares and boost their worth. 

In the crypto realm, developers execute burns by sending tokens to an address with no private key, commonly referred to as “burn address”, effectively eliminating them. This deliberate scarcity tactic gained traction around 2017, with pioneers like Binance Coin (BNB), Bitcoin Cash (BCH), and Stellar (XLM) utilizing it to control inflation and elevate coin prices. Shiba Inu also did not stand aside, presenting his unique way of burning SHIB.

What is Shiba Inu (SHIB) Coin?

Shiba Inu (SHIB) is a meme token built on the Ethereum blockchain in August 2020. Shiba Inu’s original goal was to become a “Dogecoin killer”. But there is a version that the cryptocurrency was intended as a joke, and the token made fun of Dogecoin, and did not compete with it. Shiba Inu is not a prank, however. The coin has developed a large community of fans, and its huge market cap has brought it to 16th position in the crypto rankings.

Fun fact: Shiba Inu developers sent half of SHIB to the wallet of Vitalik Buterin, co-founder of Ethereum. That’s 505 trillion coins, of which he burned 90% by sending them to a non-existent address, and donated 10% to charity. Did Buterin really hate the meme coin project so much that he made $6.5 billion worth of SHIB burn? To answer this question, let’s figure out why crypto is burned.

Why Are Tokens Burned?

In short, the purpose of token burning is to ensure sustained demand and growth for crypto assets, demonstrating a commitment to a clear, functional, and profitable token use. Since 2017, the popularity of token burning has soared, driven by various motivations:

• Eliminating Unsold ICO Tokens: 

After completing rounds of Initial Coin Offerings (ICOs), developers burn the remaining unsold tokens.

• Reducing Supply: 

Developers burn tokens to decrease the available coin count, instilling scarcity in the cryptocurrency.

• Increasing Value: 

By lessening the supply, the value of the asset rises, attracting investors and establishing higher market value.

• Managing Cost Growth: 

In instances of high inflation, reducing the price through burning becomes a necessary measure.

Now that we know why, it’s time to figure out how to burn Shiba Inu.

How Does Shiba Inu Burn Work?

Shiba Inu is known for its active token burning. Every year the burning mechanism disposes of 100T of Shib coins. In total, more than 410 trillion were burned. Shiba Inu token burning strategy is described on its official platform. This innovative approach combines both manual and automated processes, leveraging the advanced Shibarium layer-two network. During each transaction within the network, the Shiba Inu coin burning takes place seamlessly, integrated into the base gas fee and facilitated through the enhanced Burn Portal. This automated burning protocol stands as a testament to the team’s unwavering dedication to gradually diminish the circulating supply of $SHIB. Aligned with their community commitment, this method introduces an inherent burn component for $SHIB in every transaction, playing a pivotal role in shaping the coin’s supply dynamics and influencing its market value.

What Is Shiba Inu Burn Rate?

Shiba Inu’s burn rate signifies the pace at which SHIB tokens are removed from circulation. The SHIB burn rate is a crucial metric for investors and traders, influencing their strategies and decisions. When the project has a high burn rate, it often means that the community supports it strongly. This can make investors more confident and attract more interest in SHIB. Conversely, unexpected surges in burning may trigger speculation about the token’s future performance, prompting a careful analysis of the market dynamics to inform buy decisions.

Source: Shibburn

Manual Shiba Burns

Manual SHIB burns empower the community to actively reduce the token supply. Users can voluntarily transfer a set number of coins to specific burn addresses, receiving a unique token as a reward. Notably, three null addresses, inherent to Ethereum and utilized by various tokens, facilitate these burns. During the launch of Shibarium, the community burned about 20 billion SHIB tokens via the ShibBurn portal on ShibaSwap. This demonstrated the community’s commitment to decentralization and its impact on the token’s circulation.

Source: Shibburn

FAQ

Why Are Shiba Tokens Burned?

Shiba tokens are intentionally burned to decrease the circulating supply. This makes them scarce and increases their value over time. The project’s vision supports this deliberate reduction. It also encourages community participation and influences the overall dynamics of Shiba Inu’s ecosystem.

Where Do Burnt Shiba Tokens Go?

Shiba tokens that have been burnt are sent to burn addresses. Nobody can access them so this way SHIBs are successfully removed from circulation.

Does Burning Shiba (SHIB) Increase Value?

Yes, burning Shiba Inu is designed to increase its value by reducing the circulating supply, creating scarcity. Over the last month, this intentional burning mechanism has demonstrated its impact, contributing to a great increase in SHIB’s value by 37.73%.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.