You’re about to explore the fascinating mechanics behind the Shiba Inu coin burn, a process that’s been going on since Shiba’s launch in 2020. With over 410 trillion SHIB tokens already removed from circulation, the journey of how these burns influence the coin’s dynamics is far from over.
As we go over strategies and community efforts that drive these burns, you’ll gain a better understanding of the broader implications for SHIB’s future. Let’s explore the scale and significance of these burns, and what they mean for the Shiba Inu ecosystem.
Key takeaways
- Over 410 trillion SHIB tokens burned, approximately 41% of the initial supply.
- The total value of burned SHIB tokens exceeds $3.9 billion as of February 2024.
- Community-driven initiatives contribute to the burn, with over 180 billion SHIB tokens burned.
- Shibarium Layer-2 solution automates SHIB burning, potentially increasing the burn rate and affecting supply.
What is the Shiba Inu coin burn?
The Shiba Inu Coin burn mechanism is a strategic process designed to reduce the total supply of SHIB tokens by sending them to “burner” addresses, which are fundamentally unspendable wallets without private keys, thereby permanently removing these tokens from circulation. For practical purposes, these tokens disappear forever.
This deflationary tactic is essential for creating scarcity in the Shiba Inu ecosystem. Since its inception in 2020, the SHIB burn rate has been significant, with over 410 trillion SHIB tokens already removed from the initial total supply of 1 quadrillion tokens. Other meme coins that are trying to be the next Shiba Inu have also adopted similar strategies.
This accounts for approximately 41% of the total supply, which makes it one of the largest coin burns in the cryptocurrency space. The current total supply now stands at approximately 589 trillion tokens after accounting for these burns.
The effectiveness of the burn mechanism is continuously monitored, and recent statistics show a notable increase in the Shiba Inu coins being burned, particularly through community-led initiatives and the introduction of new mechanisms like Shibarium. This indicates a strong desire to sustain the burn rate and continue with the deflationary practice.
Let’s explain what Shibarium is.
Shibarium and automatic burns
Shibarium is an innovative Layer-2 solution launched in 2023, which is a great addition to the Shiba Inu Coin burn dynamics. Essentially, it automates the process. This blockchain technology boosts transaction speeds and systematically facilitates the burning of SHIB tokens through its built-in mechanisms.
With 70% of base transaction fees on Shibarium allocated to SHIB burns and priority fees directed to validators, every transaction contributes to reducing SHIB’s circulating supply.
Also, BONE tokens accumulated in Shibarium’s burn contracts are converted to SHIB for burning upon reaching predetermined thresholds. This is good news because it makes the SHIB token even more scarce.
As more applications leverage Shibarium’s infrastructure, the burn rate is anticipated to escalate.
While early indications show Shibarium’s effectiveness in automating burns, the extensive impact on SHIB’s market value is still unfolding. A lot of it depends on broader adoption and sustained community-driven initiatives.
Benefits of burning SHIB tokens
Burning SHIB tokens offers several key benefits that contribute to the token’s long-term value and market stability.
Burning causes a significant reduction in supply, which promotes scarcity. This makes SHIB potentially more attractive to investors who seek limited assets. New investors then buy more SHIB tokens, which means there’s more SHIB burned, and you can start to see the pattern.
Furthermore, regular burning activities help mitigate market volatility due to its deflationary effect.
Overall, the burning mechanic is a good sign for the Shiba Inu price prediction, but there are still various other factors at play.
History of the Shiba Inu coin burn
Over 410 trillion SHIB tokens have been burned since the coin’s inception in 2020. The most notable burn event was initiated by Vitalik Buterin, who single-handedly removed 41% of SHIB tokens from circulation.
Obviously, this drastically alters the supply dynamics.
Community-driven initiatives have also played a fundamental role, which have contributed to over 180 billion SHIB tokens being burned.
Shiba Inu burn addresses explained
As mentioned, Shiba Inu employs a burning mechanism by which SHIB tokens are sent to burn addresses. This basically removes them from the circulating supply, since those tokens can never be recovered from those addresses. These addresses are essential for controlling the token’s scarcity and value perception.
- Burn addresses are wallets without private keys, making the tokens sent to them inaccessible forever.
- Vitalik Buterin and the Shiba Inu team have utilized three primary burn addresses to incinerate SHIB tokens.
- Over 410 trillion SHIB tokens have been burned, considerably impacting the original quadrillion token supply.
The three burn addresses are:
- Burn Address 1 (used by Vitalik Buterin to burn his SHIB)
- Burn Address 2 (also used by the Shiba Inu team for ShibaSwap listings)
- Burn Address 3 (this address is sometimes called the Black Hole)
Be warned: any tokens you send to these addresses will be lost forever.
SHIB tokens burned so far
The significant reduction in supply has been due to the initial burn by Vitalik Buterin, but also by collective efforts through community initiatives that have contributed to over 180 billion SHIB tokens burned.
The total value of burned SHIB coins exceeds $3.9 billion as of February 2024.
Recent statistics highlight an increasing burn rate, with a 299.60% increase compared to previous periods.
Impact on SHIB price and scarcity
The burning of SHIB tokens impacts the scarcity and potentially the price of the cryptocurrency. Here’s how:
- Reduced Supply: With over 410 trillion SHIB tokens burned, representing about 41% of the initial supply, the burning mechanism noticeably reduces the available supply. This creates scarcity.
- Market Dynamics: Despite the massive burning efforts, SHIB’s price remains volatile, recently seeing a 13% increase over a week. This shows us that while burning can influence scarcity, other market factors still play a more relevant role in price action.
- Economic Impact: The total value of burned SHIB exceeds $3.9 billion. However, the relationship between burning and price isn’t straightforward.
The bottom line
You’ve seen how the Shiba Inu community has actively burned over 410 trillion SHIB tokens, worth more than $3.9 billion. This process, involving sending tokens to inaccessible addresses, aims to reduce circulating supply and potentially increase scarcity and value. The introduction of Shibarium has further streamlined burns, making the process more efficient. As the community continues to engage in these strategic burns, it is likely that the deflationary effect these burns have will continue to take its toll.
If you’re looking to learn more about meme coins, make sure to check out our article explaining how to find new meme coins early.
