Shiba Inu was one of the most hyped tokens in 2021. A part of that success is owed to fact that meme coins saw a drastic surge in price after Dogecoin had tremendous success. But presenting cute memes alone isn’t enough to drive the project to further success. Believe it or not, even a meme coin like SHIB has a team behind it that is constantly working in the background helping the community and the token to thrive.
How will Shiba Inu improve its ecosystem by burning tokens? And what will be the reward for token holders sacrificing their assets?
The burning portal is up and working
The burning portal was announced by the team via Twitter in April and has already opened its doors to the community. Its function is relatively simple. It is a so-called burning address that will destroy all SHIB tokens that will be transferred to it.
Token holders can make use of the portal by sending their SHIB tokens and burning them forever. In effect, the total supply of Shiba Inu gets reduced. Burn mechanisms have been proven to contribute successfully to a project’s tokenomics time and time again. If the incentive of holding a token is high and the supply gets constantly burned, demand will eventually meet a scarce supply.
On April 25th the developers announced via Twitter that 8 billion SHIB were burned through the portal. At the time of writing this article a total amount of 24 billion SHIB are gone forever.
Why would anybody burn SHIB?
The idea behind the token burn is that users will receive a reward in return. By burning SHIB they receive a token called burntSHIB which will entitle them to earn rewards denominated in a third token.
That token is RYOSHI which is named after the anonymous founder of Shiba Inu. The mechanism is meant to make it more attractive to burn SHIB and receive RYOSHI while at the same time making Shiba Inu scarcer. This sounds a little bit crazy at first glance but might drive even more demand over time.
It was yesterday when the developers announced that the reward cycle for receiving RYOSHI will start May 17Th and continue every two weeks. Yet, it remains to be seen if investors were well advised to burn their SHIB rather than holding the token and hoping for further gains.