Shiba Inu has one of the largest number of tokens in circulation among large-cap cryptocurrencies. A way for it to cross $0.1 or even $0.01 is through its massive burn targets. However, with the current burn rate, it seems unlikely that it will ever reach its burn or its price targets.
We will also explore how Shiba Inu is trying to increase the amount of burns with the help of Shibarium.
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Why Is Burning Essential?
Burning is a process of destroying cryptocurrencies by sending them to a wallet which takes them out of circulation. The burn addresses are often controlled by the entities which had issued the cryptocurrency.
Burning helps in reducing the circulating supply of a cryptocurrency as those coins which were sent to the burn address are meant to stay there forever.
In the case of cryptocurrencies which have a high token supply, like Shiba Inu, burning helps increase the value through decreasing its supply. This essentially appreciates the value of a cryptocurrency, therefore benefitting every token holder.
However, one problem associated with burning is that, who will send their tokens to a burn address forfeiting them forever. In cryptocurrencies that are actively burned, this responsibility is taken by the entity or the governing body which maintains the project.
Often, a small part of collected fees are sent to the burn address.
Current Shiba Inu Burn Statistics
In the last 24 hours, Shiba Inu has increased its burn statistics by approximately 50%. The current burn levels indicate that in the last 24 hours preceding the press time of this article, about 70 million tokens were burnt.
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Required Rate To Cross $0.1?
$0.1 is a very important goal for every member of the SHIB community. This is because cryptocurrencies like Shiba Inu are bought with the primary intent that they will someday increase in value just like Bitcoin.
However, even after achieving the top 20 crypto status, and being valued at over $4 billion, there is still a long way for Shiba Inu to go.
To achieve a $0.1 value which is 13k times more than its current price ($0.0000073), it has to increase its value by 13k times. This increase seems not possible with just burning. Let’s explore why!
The current supply is 579 trillion tokens. To achieve $0.1, this supply has to be reduced by a factor of 13k which would make the total supply at 44 billion. A reduction of 578.95 trillion tokens.
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Assuming the current burn rate of 74 million per day, it would take 7.8 million days or 21.4k years.
Clearly, that is not a good rate for achieving the $0.1 target.
What Is a Desirable Rate?
Recently, there was a figure of 5 trillion burns per month, that was being quoted by several news agencies and websites to be a desirable monthly burn amount. This would reduce the burn period to just 115 months or 9 years and 7 months.
But, how will Shiba Inu achieve this burn rate?
The answer is through Shibarium.
Shibarium’s purpose as an L2 blockchain does not only stop at providing an alternate and cheaper way to transact SHIB but also brings the transaction fees to Shiba Inu’s ecosystem that was earlier consumed by Ethereum.
A part of these fees could be burnt to reduce the supply of Shiba Inu in the overall crypto market.
With Shibarium, Shiba Inu teams want to attract as much activity as possible on the L2 blockchain. This would enable the shift of approximately around $79m worth of daily transactions to the Shibarium blockchain and as a byproduct of the process, will accelerate the burning of tokens.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.