The Shiba INU platform to stabilize the SHIB price had earlier introduced a burn mechanism after Ethereum’s ETH 2.0 with EIP 1559 upgrade went operational. However, the burn mechanism does not appear to have fueled the price rally as both SHIB price and ETH price are drowning in the same bearish well, despite the fact that the tokens continue to burn as per the algorithm.
Recently, Shiba INU achieved a milestone by burning nearly 12.6 billion SHIB tokens in one day worth nearly $123,551. Despite the burn rate still increasing by more than 5,000%, the price remained largely unchanged. A similar case was recorded with the price of ETH. According to the burn portal, over 2,340,000 ETH have been burned since its inception. Additionally, the burnt tokens were well ahead of the tokens issued on the same day.
Therefore, when the burn mechanism has not led to any major impact on the second-largest token, Ethereum and the most popular memecoin Shiba INU, How fine will it be for the LUNA price?
As the whole community is currently after burning the excess tokens hit when the UST was heavily de-indexed. LUNA tokens in circulation are closely tied to the UST peg. As the stablecoin lost its peg, new LUNA tokens were minted and flooded into the market. The circulating supply has skyrocketed from just 1.46 billion to 6.53 trillion at press time. This had a big impact on the price, which is around $0.000134 and hence the community is constantly asking to burn the tokens instead of a fork or LUNA V2.
Considering the previous history of very popular tokens, which were merely impacted by the burn mechanism, burning LUNA tokens may also not be the one-stop solution to stabilize the LUNA price. And hence the team behind the tokens may have to have a strong plan to stabilize both LUNA and UST prices at the same time.
