Shiba Inu Token Burn: Definition and New Mechanism!

Bittime - Shiba Inu token burn launches a new mechanism to reduce the number of tokens in circulation while increasing the value of SHIB tokens. 

This article will discuss the meaning of the new mechanism. Read this article to find out more! 

What is Shiba Inu Token Burn?

Shiba Inu token burn is the process of removing SHIB tokens from circulation by sending them to an address that cannot be accessed or reused. 

The token burn was carried out as part of the expansion of Shibarium, a Layer 2 blockchain solution designed to increase transaction efficiency in the Shiba Inu ecosystem.

Shiba Inu token burn is part of a deflationary strategy, which aims to create a scarcity of SHIB tokens. 

With supply decreasing, the value of the SHIB token is expected to increase, in line with classical economic principles of the relationship between supply and demand.

Read Also: Shiba Inu Price Today, How Much Is 1 SHIB Coin Rupiah?

Shiba Inu Token Burn New Mechanism  

Shiba Inu token burn has integrated a new community-based mechanism in the Shibarium expansion, namely by collecting a small fee from every transaction that occurs on the Shibarium multi-chain network.

These collected fees are then used to burn SHIB tokens on the Ethereum blockchain. This process is carried out by sending tokens to a special address that cannot be accessed so that they are completely out of circulation.

Shiba Inu developers stated that this mechanism will be continuously updated to increase efficiency and reduce burning costs. The development team is exploring the use of the CCIP protocol to further optimize this process.

Shibarium Expands Shiba Inu Token Burn Mechanism  

Shibarium's expansion to a multi-chain framework is a key element in this new Shiba Inu token burn mechanism. 

Every transaction, whether trade, swap or transfer, within the Shibarium ecosystem now contributes to a reduction in the supply of SHIB tokens.

With a multi-chain system, Shibarium not only expands the reach of the ecosystem, but also ensures that regular activity on the network directly supports deflationary strategies. 

Read Also: Shiba Inu Burn: SHIB Token Burn Update

Impact of the Shiba Inu Token Burn Mechanism  

The implementation of this new community-based Shiba Inu token burn mechanism has a significant impact on the SHIB token. 

With decreasing token supply, the price of SHIB tokens is expected to rise, especially if demand remains or increases.

This strategy provides long-term benefits for investors and communities because their participation directly influences the economic dynamics of the ecosystem. 

Read Also: Shiba Inu ($SHIB) Price Analysis and Prediction

Shiba Inu FAQs

What is Shiba Inu?

Shiba Inu is a crypto asset that was originally known as a meme coin with the iconic Shiba Inu dog mascot, but has now grown into a project with a broad ecosystem, including DeFi, token burning, and a Layer 2 solution called Shibarium.  

How Does Shiba Inu Token Burn Work?

Shiba Inu token burn is carried out by permanently removing a portion of the SHIB token supply to reduce the number in circulation, so that the token becomes scarce and hopefully increases the value of the token.

What's that Shibarium and the Benefits for Shiba Inu?

Shibarium is a Layer 2 Shiba Inu solution designed to increase transaction speed, reduce gas fees, and support blockchain-based application development.

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Reference

Gushiken Yona, Shiba Inu Implements New Token Burning Mechanism Within Shibarium Expansion, accessed December 31, 2024.

Author: IPR