A major participant of the SHIB team, content marketing specialist Lucie, decided to get back to the topic of the Shiba Inu burn mechanism implemented in Shibarium and posted a lengthy tweet, explaining again how it will work as soon as Shibarium mainnet is launched.
SHIB burn mechanism explained in detail
The mechanism operates as users conduct transactions on Shibarium and pay gas fees in BONE tokens. The fee gets split up into a base fee (it is locked in a Shibarium contract), and the rest goes to Shibarium validators. Then, 70% of the base fee is converted into SHIB and sent to dead wallets (burned). Thirty percent is put aside for developers to maintain the network in an operational state.
Burns have a positive affect on SHIB as they reduce its enormous supply; roughly half a quadrillion SHIB are currently circulating out there in the market. Lucie stated that users can also burn SHIB tokens on their own initiative using the Shibarium website. This makes SHIB deflationary and incentivizes user engagement.
$SHIB BURNS X #Shibarium, #Shibarium significantly impacts the Shib ecosystem by introducing a burning mechanism that reduces the supply of $SHIB . When users make transactions on the network, the base fee is locked on a Shibarium contract, while the priority fee is paid to… pic.twitter.com/uhqvwDWgdW
— 𝐋𝐔𝐂𝐈𝐄 (@LucieSHIB) June 30, 2023
Here's how else burning helps SHIB
Lucie stressed that by reducing the circulating supply of SHIB tokens, burns have the potential to give holders extra benefits since the value and scarcity of their SHIB goes up as more and more meme tokens get moved to unspendable wallets and locked there permanently.
Burns also help to maintain the supply-demand balance in the Shiba Inu ecosystem – the demand is expected to keep rising constantly, while the number of tokens in circulation decreases.
As reported by U.Today earlier, over the past 24 hours, the SHIB community has destroyed 50,258,924 SHIB in total, thus raising the burn rate by more than 1,800%.
Alex Dovbnya
Denys Serhiichuk