Robert Steinadler, 2 months ago
Each project has so-called tokenomics, and they are a driving factor when it comes down to growth in price and user base. Shiba Inu is waiting for the launch of Shibarium and while the community is already excited, other trends are worth paying attention to.
Why and how is SHIB burning tokens, and how is this beneficial for the token's price?
It was yesterday when the SHIB burn rate jumped up to over 500% and destroyed well over 6 million SHIB. Of course, this is just a tiny amount when compared to the total supply, but it shows that burning tokens could become one of the main driving factors behind SHIB’s tokenomics.
It is expected that once Shibarium is going to launch, the burn rate will increase drastically. The second-layer solution is supposed to be a major driving factor for the project. There is still no launch date available and at the same time, social media is going wild over the fact that the beta launch is just around the corner.
Burning the token supply is often used to make the token scarce and therefore more valuable. Of course, the value also depends on the demand and therefore on the use case. In this sense, the constant burn ensures scarcity and the service of Shibarium the demand for SHIB.
But that’s not the only thing that kept the SHIB hype going throughout January. According to the available on-chain data, there are massive entities involved with SHIB. It is not only the most traded token among big entities but also the largest known position these entities have taken in terms of dollar value.
It remains to be seen if SHIB can keep up with the growth of last month in February. The most recent decision of the Fed appears to have inspired the crypto market, sparing it from heavy sell-offs at the time of writing.
However, we are not out of the woods yet and the next important event will be US CPI data that is released on February 14th. Ironically, the real world's economy might have once again an impact on a meme coin's price. Should the price recovery of SHIB continue, it remains to be seen if it breaks out above the range that it is trading for since June last year.
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