Shibarium, a Layer-2 scaling solution supported by Shiba Inu, has seen a significant decrease in transaction counts, raising concerns about its adoption within the Shiba Inu ecosystem. According to data from the Shibarium Explorer, the number of daily transactions on the network has dropped to 5.69 million, down from an average of 7 million transactions per month recorded last month. This declining trend has continued since the start of the year, with daily transactions reported at 7.84 million on December 28, 2023, dropping sharply to 4.37 million by January 4, 2024.
Despite the decrease in transactions, Shibarium’s network utilization rate remains at 27.51%, indicating that the Layer-2 protocol has enough bandwidth to handle more transactions than it is currently processing. Additionally, the block time has improved, with block times now recorded at 5.0 seconds compared to 5.3 seconds less than a week ago. This suggests that Shibarium is striving to increase its efficiency even as transaction volume declines.
Shibarium has facilitated 266,645,659 network transactions involving 1,326,992 registered addresses on the Layer-2 network, demonstrating the scale of activity within the Shiba Inu ecosystem. However, the recent decline in transactions raises questions about the sustainability of this growth.
A notable development in the Shiba Inu ecosystem is the significant increase in the token burn rate. The most recent day saw over 53.5 million tokens taken out of circulation, representing a remarkable 2,068.92% increase in the burn rate. This surge in burning activity aligns with the Shiba Inu team’s announcement in early December 2023 about introducing automated SHIB burns.
Furthermore, a member of the Shibarium team, RagnarShib.eth, mentioned in a now-removed post that there will be a burn of 9.25 trillion Shiba Inu tokens in the near future. This initiative will utilize the $1 million worth of BONE, or 101,522,842,639 SHIB tokens, that the team disclosed in late 2023. Already, more than 36 billion of these tokens have been transferred in several transactions to non-recoverable blockchain addresses, totaling over 8.5 billion SHIB tokens. This burn plan demonstrates Shiba Inu’s commitment to improving token utility and addressing inflation concerns.
The decrease in transactional activity on Shibarium has had a noticeable impact on the price of Shiba Inu. Currently, Shiba Inu has experienced a 5.70% decrease, with its value at $0.000009029. This decline follows its peak price of $0.00001089, further highlighting the challenges faced by this meme coin.