Shiba Inu: 105 Million Tokens Burned – Burning Rate Temporarily Skyrockets
Over the past 24 hours, more than 105 million Shiba Inu tokens have been burned to reduce the circulating supply, at one point causing the burning rate to surge by approximately 140,000 percent. Shiba Inu also reported this on Twitter. However, it appears that this spike was only temporary, as the burning rate has now nearly completely decreased by 99.98 percent. This is not the first time Shiba tokens have been burned. The original circulating supply of SHIB tokens was one quadrillion. Since then, around 410.7 trillion tokens have been burned. Burning means that the tokens are sent to a so-called dead wallet, which no one can access.
Looking at the price over the past week, not much has changed. On August 2, the price was $0.000016, and on August 9, it was $0.000014. Only after the crash from August 4 to August 5 did the price briefly drop to $0.000011.
Why SHIB Burning Has Little Effect
The purpose of burning tokens is to reduce the circulating supply so much that, following the simple principle of supply and demand, the price per token increases. However, even though 105 million tokens sound like a lot, the effect remains absent. To achieve a noticeable impact, the number of burned tokens would need to be significantly higher.
As a reminder, Ethereum founder Vitalik Buterin was initially sent a large number of tokens by the Shiba Inu developers, of which he burned 410.24 trillion tokens valued at $6.8 billion. This fueled the price at the time, but the hype generated by this action was likely the primary factor. Apart from Buterin, only about 500 billion tokens have been burned so far.
Burning 500 billion tokens has little impact, as this represents only about 0.085 percent of the total circulating supply. Currently, there are approximately 590 trillion Shiba Inu coins in circulation.
Moreover, an increase in the price per SHIB token would have little effect on the overall value of Shiba Inu. This is because the circulating supply decreases as a result of the burning. The value of a cryptocurrency is determined by its market capitalization, which is calculated by multiplying the number of coins by the price.
