Almost half a billion SHIB tokens have been removed from circulation in 24 hours, spiking its burn rate. According to data from Shibburn, approximately 455 million Shiba Inu tokens have been burned in the last 24 hours, a 1,322.79% rise in burn rate within a day.
One of the mechanisms that check the over-saturation of an asset in the crypto market is burning. Many uncapped crypto assets rely on the mechanism to remove a large number of coins in circulations, thereby limiting supply and maintaining relevance. Shiba Inu is one of the tokens that have engaged in token burns.
Aside from today’s burn activity, Shibburn recorded massive burn rates over the past few days after the launch of the Shibarium beta testnet, PuppyNet. As of March 9, before the beta launch, Shiba Inu burn rates surged by 28,000% in a day, suggesting the total burned tokens of 2,057,811,344 Shiba Inu.
Massive Spike In Burn Rate Following Shibarium Testnet Launch
After much anticipation, Shiba Inu’s core developer revealed the Shibarium Beta testnet called PuppyNet went live on Saturday, March 11. However, the network recorded a remarkably unusual rise in burn rate after the testnet launch.
On Monday, two days after the PuppyNet test network went live, the Shiba Inu burn rate increased by 2,452%. The token burn saw 602.5 million SHIB removed from the circulating supply within 24 hours.
However, it was not the same on March 14, as the burn rate only increased by 200%. Today’s 1,322.79% burn rate is much closer to Monday’s.
At press time, about 454,985,164 Shiba Inu tokens have entered the burn wallets, with over 410 trillion SHIB burned from the initial token supply.
The likely reason for this high burn rate is the rise in network activity following the PuppyNet release. Recall that last month, SHIBARMY Tweeted that SHIB burn would occur on Shibarium with every transaction.
The reason is that BONE tokens used to pay transaction fees on Shibarium get converted to Shiba Inu. And these tokens must enter the burn addresses or wallets to prevent them from increasing Shiba Inu’s circulating supply.
According to speculations, the Shiba Inu community would have an increased burn rate after the Shibarium mainnet launch. The increased burn rate would see trillions of SHIB coins in the dead wallets.
SHIB Price Outlook
The myth behind token burns is that it pushes the asset’s price by reducing the circulating supply, creating scarcity. Following this logic, one would have expected the recent spike in burn rate to reflect SHIB’s price. However, the reverse seems applicable here, as Shiba Inu witnessed price declines over the past week.
At press time, Shiba Inu has recorded a 1.89% decline over the past seven days, with a 5.18% 24-hour loss in value. But SHIB recorded a notable price increase on March 13 and is now trading at $0.00001089.
Featured image from Pixabay and chart from Tradingview.com