Shiba Inu is a cryptocurrency that features in the second position in the meme con segment in terms of market cap. The dog-themed digital token gained popularity when memes around Shiba Inu, the dog, went viral on the Internet. Investors later went on to realize its potential to further fuel adoption. SHIB is currently exchanging hands at $0.00001776, up by 22.65% in the last 30 days but down by 2.56% in the last 24 hours.
Shiba Inu is also popular because of its unique burning mechanism. This article explains the Shiba Inu burning mechanism in detail, along with its purpose and effect on the token.
What is Token Burning Mechanism?
A token burning mechanism is a systematic elimination of digital tokens from the circulating supply. In SHIB’s case, it refers to transferring the meme coin to a wallet that cannot be accessed for withdrawal. Thereby, bringing down the number of Shiba Inu tokens that are available in the market for trade.
Tokens transferred to the wallet cannot be revived. This causes scarcity to trigger the rise.
What is Shiba Inu Burn Rate?
Shiba Inu burn rate is a burning mechanism that is specifically applicable to SHIB. The transparent process can be tracked on the Ethereum blockchain periodically, or as & when the token is burned. Shiba Inu burn rate is backed by its burning portal called ShibBurn. It alternatively presents itself as a gateway for users to earn rewards for burning their holdings.
ShibBurn recorded burning almost 20 billion tokens in the first five days of its launch. Developed in association with Ryoshi, ShibBurn continues to go strong in burning SHIB and rewarding users for it.
Purpose of Shiba Inu Burn
The purpose behind the Shiba Inu coin burn rate is to create scarcity in the market. It stems from the basic economic principle that the price rises when the circulation is in limited quantity. Every time SHIB tokens are burned, the number of tokens reduces drastically, and that triggers an uptick in the price. In other words, the purpose behind Shiba Inu burn is to counteract the inflationary pressure that may happen when the token is minted or distributed in the community.
It balances the demand-supply mechanism effectively to control the market value of Shiba Inu.
Working on Shiba Inu Token Burn Mechanism
The working of the Shiba Inu burn mechanism is automatic and straightforward. It does not precisely require any manual intervention. Any time a user executes a transaction, a portion of the transaction fee is transferred to the null address. This is the same wallet that cannot be accessed to withdraw SHIB. Tokens are permanently removed from circulation depending on the burn rate of Shiba Inu, which could be higher or lower.
Only a small percentage of the transaction fee goes to the null wallet. That cannot be modified by users unless there is a major upgrade within the Shiba Inu ecosystem.
Effect of Token Burning on SHIB Coin Price
Current sentiments around Shiba Inu are bearish amid the volatility of 7.44%. They are likely to change to bullish as more tokens are burned. Shiba Inu price prediction is bullish with a year-end estimate of $0.00001903. The more SHIB cons are burned, the higher the prediction is speculated to go from that point.
Suffice it to say, token burning is good for Shiba Inu ($SHIB), as it brings down the number of tokens and rewards users for their participation.
Conclusion
The Shiba Inu burning mechanism is essential for SHIB. It balances the supply in circulation and controls the inflationary nature of SHIB. The purpose is to create scarcity while fueling upticks in its prices.
