Industry-leading meme cryptocurrency is losing some ground beneath it, but recovery is still possible
The burn rate of one of the biggest meme tokens on the market has dropped drastically. Such a drastic reduction in the Shiba Inu lit supply should be considered a negative factor, especially during a bleeding cryptocurrency market. But there is a solution.
Shiba Inu’s burning mechanism does not work in the same way as Ethereum’s. Instead of automatically burning part of the transaction fee on the network, SHIB has three specific addresses that users voluntarily send funds to and remove tokens from circulation.
Technically, no burning mechanism exists over the network; The funds are sent only to the wallet which no one will ever be able to access. However, it is sufficient to reduce asset inflation. Strong spikes in burn volume are fueled by individuals or firms pledging to burn a certain amount of tokens. A decrease in burn volume suggests that companies are experiencing a drop in Shiba Inu revenue or have no additional tokens to burn.
How can situation change?
The only way to provide more burning volume is to fuel the revenue of companies that pledged to use the part of the Shiba Inu tokens they got from selling goods or services. Some users might want to use SHIB as a means of payment, which should help the network to accumulate more volume to burn.
Unfortunately, the small batch of tokens being burned does not provide the necessary value to influence the price of SHIB. Shiba Inu has lost over 40% of its value since October, making the last two months one of the worst periods for the coin.
Thankfully, the recovery of burning might bring investors’ attention back to the prominent meme token.
