Shiba Inu, created by a person known as Ryoshi and others in August 2020, is trending. It gained widespread attention in May of the following year when its founders sent half the supply to Ethereum co-founder Vitalik Buterin. Vitalik decided to burn 90% of SHIB assets, which accounted for more than 40% of the total supply, or approximately 410 trillion coins.
Reasons behind burning Shiba Inu tokens
Vitalik’s action of burning these Shiba Inu tokens attracted attention. Accordingly, SHIB caused significant volatility, with an increase in prices of approximately 40%. The Shiba Inu community continued to burn tokens in an attempt to increase the value of the remaining tokens and reward their loyal owners. Of course, there are some reasons why cryptocurrency projects burn tokens. The first of these is famine. Accordingly, burning tokens increases the rarity of the remaining tokens. Thus creating a sense of scarcity that will potentially increase their value.
The second reason is inflation control. The Shiba Inu token burn reduces the total supply of tokens in circulation. Thus, it helps maintain a stable and predictable inflation rate. On the other hand, a third reason is that burning tokens stimulates the demand for the remaining tokens. Thus, they can potentially increase their value and attract more investors and speculators.
Destination of Shiba Inu tokens
The Shiba Inu token burning mechanism works through specific wallet addresses that store the burned tokens. The SHIB development team does not create these burn addresses. They are part of the Ethereum network and are also used by other tokens.
There are three main SHIB burn addresses currently in use. The first of these is the address that Ethereum co-founder Vitalik Buterin used to burn a significant portion of his SHIB tokens. The second burn address is used by the Shiba Inu team for ShibaSwap listings. The third address, known as the Black Hole, is associated with the Ethereum genesis address.
Track SHIB burns with SHIB burn trackers
All Shiba Inu cremation processes are transparent. It can also be tracked on the Ethereum blockchain. Two popular websites are Shibburn and Shiba Burn Tracker. These two sites offer real-time records of SHIB burnings. These platforms provide details about the respective burn addresses, amount of tokens burned, and timestamps.
From Kriptokoin.com, it is important to note that large token burns alone may not significantly affect the price unless a significant amount of tokens are purchased continuously for the burn. As explained by Shibburn, burning a large number of tokens in a short period of time may not affect the price when much larger transfers are purchased daily. In addition to burning transactions, the token price is also affected by factors such as demand, liquidity and overall supply.
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