One of the features of Shibarium is the SHIB burn mechanism, which reduces the total supply of SHIB tokens over time and creates deflationary pressure on the price.
The SHIB burn mechanism works as follows:
When a user makes a transaction on Shibarium, they pay a gas fee in BONE tokens. The gas fee consists of two parts: the base fee and the priority fee.
The base fee is the minimum amount that a transaction must pay to be valid. It varies depending on the network congestion and is burned, meaning it is not paid to the validators who produce blocks.
The priority fee is the amount that a transaction pays to the validators who include it in a block. It can be set by the user and acts as an incentive for validators to prioritize transactions with higher fees.
The base fee is split into two parts: 70% is locked in a contract on Shibarium, while 30% is set aside to maintain the network.
Once a certain amount of BONE ($25,000) is accumulated in the burn contract, users can start the burn process from Shibarium. This process involves sending the BONE tokens from Shibarium to Ethereum's layer 1, where they are automatically swapped for SHIB tokens and burned by calling a function on the SHIB contract.
Anyone can initiate the burn process by using a specific portal on Shibarium's website and confirming a few transactions to allow the layer migration.
Once the burn process is complete, SHIB tokens are permanently removed from circulation and this is reflected on the total max supply.
The SHIB burn mechanism is designed to create a positive feedback loop for the #Shibainu ecosystem.
By burning SHIB tokens every time a transaction is made on Shibarium, the demand for SHIB increases while the supply decreases.
This creates scarcity and value for $SHIB holders and encourages more users to adopt Shibarium as their preferred platform for fast and cheap transactions.
What do you think about Shibarium burning process? any comments to share? cheers ☕
*this is not financial advice, always #dyor
