Shiba Inu’s token burn rate has seen a remarkable surge of nearly 6,000% recently, despite a decline in transaction activity on the layer 2 network Shibarium. This surge in the burn rate has coincided with a 5% increase in the price of SHIB, as investors turn bullish ahead of key events.
Recent data indicates that Shiba Inu has experienced an unprecedented increase in its token burn rate, with over 9 billion SHIB tokens permanently taken out of circulation in the last week. This represents approximately 10% of the total number of SHIBs burnt last year.
The launch of Shibarium, the network’s layer 2 project, promised an increase in the intensity and quantity of SHIB tokens, and this promise is now evident in the recent data.
Token burning is designed to reduce the circulating supply of a coin, theoretically diminishing supply and influencing demand, which in turn propels prices higher. Interestingly, the price of SHIB has indeed recorded an uptick alongside the surging burn rate.
Currently, SHIB is trading at $0.000009675, following a 5% surge in the last 7 days. However, the altcoin has experienced a temporary drop of nearly 3% in the last 24 hours, which is consistent with the trend witnessed across the crypto market.
The development team behind the project remains committed to increasing the burn rate based on network activity, as they continue to build towards mass adoption. Lead developer Shytoshi Kusama has promised game-changing updates in 2024, including plans to conquer the domain space and build infrastructure for the use of 5.3 billion people worldwide.
While the layer 2 network Shibarium has experienced overall growth, recent data shows a decline in daily transactions. In December, the average daily transactions stood at 7 million but dropped to 2 million at the start of this month. On December 28th, transactions reached 7.84 million, but on January 13, they dropped to 1.16 million.
This decline in transaction activity may be a concern for some investors who are expecting increased growth in the new year. However, other metrics have shown growth, such as the generation of 2.64 million blocks and the increase in wallets to over 1.3 million. In less than a year since its launch, the network has surpassed 250 million transactions and has locked over $1 million worth of assets (TVL) on Shibarium.
If Shibarium can maintain its upward trajectory, it has the potential to compete with leading layer 2 networks like Polygon, Polkadot, Arbitrum, and the Celer Network.