Is the SHIB price in danger?

TL;DR

SHIB’s price fell 26% in 30 days, with a 90% decrease in its burn rate, hinting at possible further declines. Shibarium also introduced a combustion mechanism that differs from the original.

Another worrying sign

The second largest meme coin has underperformed lately, with its price falling roughly 26% on a 30-day scale. Its market capitalization dropped below $8 billion, making Shiba Inu (SHIB) the 16th largest cryptocurrency.

Some important indicators indicate that the decline may intensify in the near future. One example is the burn rate, which has plummeted by more than 90% weekly, resulting in fewer than 13 million tokens sent to a null address.

The ultimate goal of the combustion mechanism is to reduce the huge circulating supply of SHIB, making it scarcer and potentially more valuable over time. A key factor in this price increase is the level of demand, which must remain or increase (as the fundamental principles of economics dictate).

Over the past few years, the Shiba Inu team has burned through more than 41% of the initial supply. The circulating supply currently stands at around 583 trillion tokens.

Other worrisome signs that could be interpreted as bad news for SHIB bulls include declining net net growth and reduced whale activity.

The latest Shibarium update

Speaking of the recording program, it’s worth mentioning that Shiba Inu’s layer 2 scaling solution also launched a similar initiative. As CryptoPotato reported, the team introduced a designated “Cream Portal.”

The recording mechanisms of SHIB and its L2 network are aimed at reducing the global supply of tokens, but they work quite differently.

The original Shiba Inu cremation program is largely based on community initiatives and manual cremations. Holders of the meme coin can voluntarily send coins to a specific null address, a wallet from which tokens cannot be recovered, effectively removing them from circulation.

In the Shibarium ecosystem, BONE is the governance token that plays a crucial role, especially for validators and delegates within the network. The currency is used to pay gas fees, and those interacting with the L2 scaling solution would need BONE to cover these costs.

Burning SHIB on Shibarium is related to transaction fees. A portion of the costs, paid in BONE, is used to purchase Shiba Inu tokens, which are then sent to a null address. Once there are enough BONE tokens, users will be able to start a recording. For now, they need at least 100 BONE tokens.

For more updates on the ecosystem, be sure to check out our Shibarium News.

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