Token burning involves removing a digital asset from circulation indefinitely and reducing its supply. But how does this work in practice?

Burning cryptocurrencies and NFTs is similar to burning cash or artwork, but the process is a bit more complicated than lighting a match.

But why would a crypto project want to destroy its own tokens? There are many reasons for this, and we will explore them.

What is token burning?

What does burning a token actually mean? Burning a digital asset involves sending tokens to a location from which they can never be recovered. These are also known as burn addresses, which effectively remove digital assets from circulation by locking them up forever.

A burning address is a digital wallet that cannot be accessed because it does not have a private key. Like a lock without a keyhole. Burning addresses are sometimes called "eater addresses".

Sending tokens to a burn address effectively removes the digital asset from the entire supply. That way, no one will have access to it, so no one can trade with it.

Burning tokens can also lead to an increase in the price of tokens that are still in circulation. The price of an asset can be understood as the relationship between supply and demand. If there is less of an asset available to investors than there is demand for it, the asset will become more valuable. See for example Bitcoin, of which there will be a total of 21 million available. On the other hand, if there is plenty of stock and enough to satisfy demand, the price of the asset often falls. An example is the Shiba Inu, which has an infinite amount of tokens, which can also be seen in its price.

By reducing the supply of tokens, burning tokens can create an imbalance with demand, which generally moves the price of the token upwards due to the increased scarcity of the asset.

Why is it necessary to burn tokens?

Occasionally, crypto projects burn their tokens in much the same way that companies buy back their shares, absorbing the cost of the shares. For this reason, projects burning tokens can even be interpreted as positive news, but they do not always have an immediate impact on prices.

This is because some token burns have been automated so that they happen regularly. But it also happens that they are released much earlier, so they are actually priced at the value that the token was trading at long before the burn. But it is also possible that other news related to digital assets has a greater influence on its price movement.

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#crypto #crypto101 #cryptocurrency #burn #SHIB

SHIB price slides despite burn rate drawing close to 40,000% for second time this week

Shiba Inu (SHIB) may be seeing a mild slump in its price at this time, but it is showcasing unique strength in other areas that define its network strength. The second largest meme coin by market capitalization is seeing a parabolic upshot in its burn rate, a showcase of a healthy network.

SHIB burn rate almost 40,000%

According to data from Shibburn, Shiba Inu's burn rate recorded 3,8986.28% growth over the past 24 hours. One surprising revelation from this milestone is that the SHIB token burn rate is seeing such massive growth for the second time this week, as reported earlier by U.Today.

Image Source: Shibburn

Effectively, more than 1.69 billion SHIB tokens were sent to dead wallets this time, a figure somewhat lower than the two billion tokens burnt earlier in the week. The active wallet that helped burn the token was responsible for more than 95% of the total tokens burnt at this time.

The burn rate has a major role in determining the positivity of the Shiba Inu network; however, with one address accounting for the majority of the recorded figures, the network's health appears questionable.

Inherent price outlookW

ith a burn rate that has crossed more than 75,000% cumulative for the week, the price outlook has remained rather on the bearish side. At the time of writing, the SHIB token is changing hands at a price of $0.000009954, down by 0.74% over the past 24 hours. For the week, the meme coin is also down by 3.43%.

With the erratic rally the digital currency ecosystem has recorded over the past week, SHIB actually lost one zero in what is classified as one of the most ambitious moves for this year. Shiba Inu may be slow in its growth, but we can say it has been largely consistent since it was first introduced.

source: u.today

mage source: ai

#shibainu #burn #SHIB #dyor #crypto2023

Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

The recent burning of two billion Shiba Inu (SHIB) tokens has raised eyebrows in the cryptocurrency community due to the suspicious nature of the transaction. The wallet responsible for the significant transfer to a dead-end address has had minimal prior activity related to Shiba Inu, leading to questions about the motives behind this sudden token burn. In this article, we will delve into the details surrounding the transaction and explore why it is raising concerns.

The wallet in question has only two transactions involving Shiba Inu tokens. The first transaction involved receiving two billion SHIB tokens from Uniswap V3, a popular decentralized exchange. Following this, the wallet transferred the entire two billion SHIB to a dead-end address, effectively removing the tokens from circulation. No prior Shiba Inu-related activity has been observed from this wallet, which has drawn attention to the unusual nature of the token burn.

Token burning is a common practice in the cryptocurrency industry, often implemented as a deflationary mechanism to reduce the total supply of tokens in circulation. This can help stabilize prices and increase the value of the remaining tokens.

The sudden and significant burning of two billion SHIB tokens without any prior activity or warning raises questions about whether this was an intentional move by the wallet owner to manipulate the token's price.

Furthermore, the suspicious nature of the token burn might also attract the attention of regulatory authorities, potentially leading to increased scrutiny and oversight of the Shiba Inu project. This could ultimately have a negative impact on the token's market performance and overall reputation within the crypto industry.

#SHIB #burn #Binance #crypto2023 #crypto

While it may have been created only in 2020, Shiba Inu – a decentralized cryptocurrency that operates on the Ethereum blockchain – has already gained a significant following because of its catchy dog-themed branding and low transaction fees. In fact, Shiba Inu is the second-biggest meme coin, and it has an enthusiastic community known as the “SHIB Army.”

One of the most significant developments in the Shiba Inu ecosystem is the Shiba Inu Burn initiative, whose main objective is to limit supply of the coins in circulation, create scarcity, and force an increase in the token’s price.

Shiba Inu: Burning Milestone

A total of 2 billion SHIB tokens have been burned since Thursday morning, a remarkable feat for the SHIB Army.

With around 590 trillion SHIB in circulation, the overall goal of the ecosystem is to reduce the supply and increase the demand for SHIB tokens. This scarcity ultimately forces a price increase, making the SHIB token more valuable to investors.

However, the increase in burn rate has not lifted the price of the meme coin. At the time of writing, SHIB was trading at $0.00001008, down 11.00% in the last seven days.

SHIB has lost 30% of its price in the last 30 days, up 7% from its bi-weekly figure, according to data from crypto market tracker Coingecko.

In the last 24 hours, the meme coin has shed nearly 9% of its value as a result of the negativity surrounding the broader crypto market, data shows.

Shibarium Beta Launch This Week

Meanwhile, Shibarium, the rapid layer-2 upgrade for the SHIB ecosystem, is kicking off.

On Thursday, the Shiba Inu development team announced that a beta testnet, or a blockchain that mimics real-world functioning, is scheduled to be live this week. Users have been advised to keep an eye out for more information on how to access the Beta version.

Thousands of developers and proponents of SHIB have shown their support for the Shibarium protocol. As interest in SHIB tokens accelerates, it is anticipated that the number of coins purchased will likewise soar.

Members of the Shiba Inu community are now enthusiastic about the impending network expansion.

Significantly, the launch might substantially strengthen Shiba’s fundamentals as the “Dogecoin Killer” strives to become a more serious project instead of just being content about its meme coin status.

#shibainu #shibarium #burn #koinmilyoner #buildtogether