By
staff writer
May 17th, 2024
According to Shibburn, the Shiba Inu crypto saw a remarkable 4000% surge in its burn today, on May 6.
In response to an X post inquiring to know what users do on Shiba Inu’s scaling solution Shibarium, one SHIB enthusiast has listed a number of ways to drop the total circulating supply of the dog-themed memecoin.
Performing Transactions to Facilitate Shiba Inu Supply Crunch
The SHIB advocate known as @dhelzkiie7 on X, listed token swap as the first way to shrink the supply. This usually involves exchanging one type of token for another within the dedicated DEXs in the ecosystem. The token swaps could be part of a migration process to a new blockchain or updated token standard.
Here, the original tokens are swapped for new ones, and the old tokens are then destroyed or rendered invalid, reducing the total supply. This mechanism is prevalent when projects upgrade their technology or move to a more efficient or secure blockchain. Also, this token swap can be used in Decentralized Finance (DeFi) to facilitate liquidity provision.
With this, tokens swapped into liquidity pools are locked for a period of time, thereby reducing the effective circulating supply.
He also mentioned minting Non-fungible tokens (NFTs) as another strategy to go about the reduction of SHIB supply. Minted NFTs can be bought, sold or generally traded and these transactions would require SHIB, since they were minted on the SHIB ecosystem. If these transactions include fees that are burned or contribute to a token burn process, the overall token supply can be reduced over time.
Transferring NFTs between wallets and staking them are equally options to reduce SHIB supply. Once token or NFTs are locked for staking, they are automatically removed from circulation temporarily, amounting to reduced supply. Two other methods highlighted by the SHIB advocate include claiming staking rewards and re-rolls DN404.
The idea behind all of these methods is that users conduct transactions on Shibarium that would consequently lead to the burning of the dog-themed memecoin and reduce its supply. It is largely believed that the excessive market supply is responsible for the memecoin’s sluggish market performance.
SHIB Burn Rate Impacts on Price
According to Shibburn, the Shiba Inu crypto saw a remarkable 4000% surge in its burn today, on May 6.
Precisely, 81.64 million SHIB was burnt in the past 24 hours, resulting in growing optimism around the token’s future price movements and market dynamics. Like the economics of supply and demand, reduced supply and a substantially raised demand can drive the price of the token over time.
The impact of this increasing burn rate in addition to other drivers is reflected in the current price of Shiba Inu. At press time, the meme coin had gained 2.62% and was trading at $0.00002549. The SHIB token previously lost a crucial support level at $0.00003 but it looks like it’s on its way to regaining its position.