Key Insights:
Shiba Inu burn figures have crossed 300 million tokens, with a 3750% rise in burn rates.
High burn rates have been standard since the team automated the token burns.
Burning Shiba Inu tokens gives the community financial and sentimental benefits.
Lead developer Shytoshi Kusama has already hinted at possibly burning 99% of the tokens in circulation.
The Shiba Inu burn rate has spiked again to 300 million $SHIB a day after crashing to 1 million daily token burns. In the last 24 hours, it has spiked by 3750%, with a whopping 300 million plus SHIB burnt in the same period.
The high burn rate seems to have resulted from a 47% increase in the traded volume. In the last 24 hours, Shiba Inu’s gross trading volume was $200 million.
Burn rate describes the amount of SHIB removed from active circulation by sending tokens to a burn address. Once sent, tokens in the burn addresses are lost forever.
The process helps Shiba Inu increase its price. A lower token supply makes the token more scarce, alleviating its price. The process works on the same principle that makes gold expensive.
Shiba Inu has been known for its high token burn rates. The SHIB community loves higher burn rates because the activity helps increase the value of their $SHIB token.
However, Shiba Inu’s burn rate had recently dropped to just 1 million tokens on 30th June. The low burn rate caused uneasiness and signalled a decreasing user activity.
For the uninitiated, Shiba Inu’s burn rate is linked to the number of transactions with $SHIB. A higher total volume of transactions leads to a higher burn rate. Hence, a consistent increase in the burn rate also shows user growth.
On 1 July, the number of tokens burnt again spiked to 300 million within a day. This spike helped lift the community's sentiments, which had been down since the last week of June.
Yes, Shiba Inu’s burn rate directly impacts its price—a decrease in token circulation results in deflationary pressure on its price, which then increases.
Since 300 million tokens were burnt, the price had to be affected. Shiba Inu witnessed an intraday gain of 3.9% from $0.00001688 to $0.00001755. However, the price failed to sustain at higher levels.
The indirect impact of high burn rates is mostly sentimental.
Shiba Inu’s community values burn rates highly. The entire community hopes for a price of $1 or even $0.01, so the burn rate matters to them.
A higher burn rate sends more tokens out of circulation, thereby increasing the value of other tokens in circulation.
Shiba Inu’s team has taken several steps to ensure its burn rate remains high.
The team's most valuable step was automating burn rates. Earlier, the Shiba Inu team, which had several other important things to do, was at the mercy of burning tokens. As a result, the consistency of burning tokens suffered.
The lead developer, Shytoshi Kusama, took another symbolic step. When a user inquired if Shiba Inu is open to burning 99% of the tokens, which could help it achieve the $0.01 target, Kusama said that “nothing was impossible.” This statement was seen as a hope of increasing the token burn rates in Shiba Inu.
If the following things happen, Shiba Inu can reach the $0.01 or even the $1 target. As you look, most of them seem realistically unachievable.
If consistent burn rates of at least 1 trillion tokens a day are consistently high, the target could be achieved within 2027.
If the adoption rate goes through the roof, i.e., expands 1000x or more, it can cost $0.01.
Finally, if Shiba Inu’s market cap hits $10 trillion, which is four times the current total crypto market cap, it can reach $0.01.
However, that doesn’t mean token burns should be stopped. Token burns help, both in financial and sentimental terms. However, they must be consistent and burn a more significant percentage of tokens.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but 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.
