Why Shiba Inu Coin Burning is Important
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Shiba inu coin burning remains controversial with most investors believing not much is being done. However, the Shiba developers seem to take note of this and are coming up with projects that will assist accelerate the burning process.
Coin burning is a common strategy in use by some cryptocurrencies to reduce the amount of supply. The burning goal is offering a coin value in the long term due to increasing demand and reducing supply. Among the market leaders in burning is Ethereum.
The first major Shiba coin burning happened during the launch when over 400 trillion coins were sent to a dead wallet. This resulted in the reduction of the Shiba coin in circulation by almost half. At its launch, the coin had a coin supply of 1 quadrillion.
The current supply stands at 549 trillion coins. Some investors argue the initial burning is what made the coin famous resulting in the successes it has had thereafter.
Shiba coin burning criticism
Despite the reduction in supply, most investors still believe the current supply remains huge and thus limiting the price growth of the coin. Currently, Shiba is trading at 80% lower since hitting an all-time high in October 2021.
Due to the calls to accelerate the process of burning, Shiba developers introduced a Shiba burn portal on the Shibaswap in April this year. This allows Shiba holders to send coins to a dead wallet helping reduce coins in circulation.
The burn portal had an immediate effect as over 20 billion coins were burnt that month from 3 billion coins in the previous month. Shiba is also in the process of developing a layer 2 network blockchain Shibarium that will assist accelerate the process of burning further.
Conclusion
Until there is an acceleration in burning, the coin’s price could remain in consolidation for a long time. However, any increase in this could result in another bull rally as history dictates.
Hence, this should answer why Shiba coin burning is important.
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