SHIB tokens must be burned with every completed transaction on Shibarium. SHIB has seen increased accumulation over the past week.
While the launch date for its layer 2 blockchain Shibarium remains unknown, the developers of the Shiba Inu ecosystem are announced via a short Twitter thread on Jan. 7 that any transaction on the Shibarium network will result in the SHIB token being burned.
Read Shia Inus [SHIB] Price Forecast 2023-24
Shibarium Update 🧵
While in our last post we wanted to remind everyone that BONE 🍖 serves as the required gas token for operation within Shibarium, we now also want to formally announce that any #Shibarium transaction will burn 🔥 SHIB.
1/2 🧵 pic.twitter.com/zQRoOuL9oW
— Shibarium Network (@ShibariumNet) January 7, 2023
This announcement was made after a first confirmation on January 4 that Shiba Inu’s BONE token will power transactions on the yet-to-be-launched Layer 2 network. The developers had said,
“This is to confirm and validate, from us, the official source, that 🍖 BONE is and remains the only token selected for gas cost and usage,”
They further added:
“Shibarium was developed for Shibtoken and not for other projects claiming ownership or speculating on dependence on the operation of other tokens.”
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More SHIB is being sent to Hades, but for what purpose?
Since the launch of the ShibBurn portal in April 2022, 410 trillion SHIB tokens have been burned. The developers of the Shiba Inu ecosystem launched ShibBurn as a coin burning mechanism that allows users to generate a passive income stream by burning SHIB coins
Burning coins removes a certain number of coins from circulation permanently or temporarily. This process can be done for several reasons, one of which is to reduce the supply of coins and then increase their value.
Source: ShibBurn
This can be seen as a deflationary strategy as the total number of coins decreases which can result in an increase in their value.
Since the launch of the burning portal and more than 400 trillion SHIB tokens have been burned so far, the price of SHIB has not seen any price increase. For context, the value of the meme coin has dropped by more than 250% since then, data from CoinMarketCap showed.
A combination of the general decline of the market in 2022 and the nature of SHIB as a meme coin can be attributed as the main reasons for the coin’s continued decline over the past year.
It is known that meme coins can initially see an increase in value, but a sustained decline often follows over time. This is because the value of these coins often depends on their perceived popularity or uniqueness, both of which can be fleeting.
If the coin’s popularity declines, chances are its value will decline as well. This was the case for SHIB last year.
If you hold SHIB…
As the overall market tries to recover from a tumultuous end to the 2022 trading year, data from CoinMarketCap shows that the price of SHIB is up 4% over the past week.
With increased SHIB accumulation within that period, the Money Flow Index (MFI) rested above the neutral spot at 60 at the time of writing. Similarly, the dynamic line (green) of SHIB’s Chaikin Money Flow (CMF) was above the midline at 0.04 in an uptrend. A rising CMF is a sign of strength in the market.
Source: TradingView
Finally, the positive sentiment surrounding the meme coin has contributed to price growth since the start of the year. At the time of writing, SHIB’s weighted sentiment was a positive 2,396.
Source: Sentiment
This post More Shiba Inu [SHIB] tokens are burned, but for what purpose?
was published first on https://ambcrypto.com/more-shiba-inu-shib-tokens-to-be-burned-but-to-what-end/
