Shiba Inu's Token Burn Rate Declines 60.65% Despite 1 Billion Shibarium Transactions

Shiba Inu, a popular meme coin, has been actively engaging in token burn activities to reduce its circulating supply. The latest burn involved 15,239,220.91 SHIB tokens being removed from circulation, bringing the total number of SHIB tokens sent to dead or unspendable wallets to 819,034,689. This strategy aims to create scarcity and potentially support the token's value. However, the burn rate has declined by 60.65%, which has raised questions about the effectiveness of this approach in the current market conditions. Despite the ongoing burns and ecosystem developments, such as Shibarium reaching 1 billion transactions, the token's price has not responded positively, indicating a lack of investor confidence.

Shiba Inu's layer-2 scaling solution, Shibarium, has achieved a significant milestone of 1 billion transactions. This development is aimed at reducing transaction fees, increasing processing speed, and enabling more advanced applications within the SHIB ecosystem. However, this accomplishment has not translated into positive price action for SHIB, highlighting the current market's focus on overall trends rather than project-specific achievements. The continued negative price action despite reaching such a substantial transaction milestone raises questions about what catalysts might eventually reverse SHIB’s downward trend.

Shiba Inu's token burn strategy has been a mainstay narrative among the SHIB community, with the hope that it will drive scarcity and price support. However, recent burn behavior has been spotty and inadequate to have any real effect on the enormous Shiba Inu token supply. After a recent spike in burn rate of more than 12,000%, the last 24 hours have seen the burn rate decline by 60%. During this period, only 37.6 million SHIB tokens were removed from circulation. The volume of burning needs to rise significantly to have a measurable impact on the token’s supply. The 17.88% hike in trading volume in the last 24 hours to $311.14 million gives some indications of market action, potentially driven by larger holders stockpiling at lower prices.

Shiba Inu's long-term holders have increased by 7.5% while exchange reserves have fallen by 37%, indicating a shift in market dynamics and reduced sell pressure. This trend suggests a matured market where speculative trading diminishes. According to IntoTheBlock, over 80% of SHIB’s total supply is controlled by long-term holders. This behavioral pivot is supported by data from CryptoQuant, which reveals that SHIB exchange reserves dropped 37.6%, from 139.7 trillion to 87.2 trillion during the same period. This substantial outflow typically suggests a tightening sell-side liquidity, which is often seen as a bullish indicator in volatile market conditions. However, SHIB’s price continued to decline, implying larger market forces or lack of sufficient demand.

Shibarium, the layer-2 network of Shiba Inu, has crossed the 1 billion milestone in terms of transactions. This is notable since the network had 948 million transactions on the same day last month. Shibarium is also nearing another milestone in terms of total addresses, currently having 194.59 million, suggesting it may cross the 200 million mark later this month or in May. Additionally, the cumulative gas used on Shibarium has climbed to 38 trillion BONE and is on track to reach 40 trillion. In a post on X, Shibarium Updates described the network as moving from an era of experimentation to a “gold age” of maturity, infrastructure, and real-world value. This new ‘gold era’ of Shibarium could lead to faster ecosystem growth. DeFi Llama data shows that the network has a total value locked of over $2.17 million, making it smaller than some newer chains like Base and Berachain. Shibarium’s success will be beneficial for Shiba Inu because some of the BONE fees in the network are converted into SHIB and then incinerated.