SHIB, also known as Shiba Inu, is a cryptocurrency that has gained a lot of popularity recently. One of the key things that makes SHIB stand out is its coin burning mechanism. But what exactly does “burning” coins mean and is SHIB actively burning coins right now?
What does it mean to burn coins?
When a cryptocurrency “burns” coins, it refers to sending a portion of coins in circulation to a wallet from which they can never be retrieved or spent. This effectively takes those coins out of circulation permanently. For a cryptocurrency like SHIB that has a massive supply of 1 quadrillion coins, coin burning is seen as a way to reduce the circulating supply and potentially increase the value of the remaining coins.
How does SHIB burn coins?
There are a couple primary ways that SHIB tokens get burned:
- Sending SHIB to “dead” wallet addresses – Developers have set up a few wallets that are inaccessible, so any SHIB sent there is effectively destroyed and removed from circulation.
- Burning fees on ShibaSwap – Fees paid for transactions on ShibaSwap, the decentralized exchange of the SHIB ecosystem, are partially burned rather than going to validators.
- NFT burns – The developers behind SHIB have done special NFT drops where they burn a significant portion of SHIB used to mint the NFTs.
Additionally, any user can voluntarily burn their own SHIB if they want to decrease the circulating supply. Some members of the SHIB community hold “burn parties” where they send their tokens to dead wallet addresses.
Is SHIB actively burning coins right now?
Yes, SHIB is continuously being burned through the mechanisms described above. Though hundreds of trillions of SHIB were initially minted, the current circulating supply is down to about 549 trillion as of October 2022. Here are some key stats on how much has been burned so far:
- 410,298,341,434,320 SHIB burned to dead wallet addresses
- 62,534,057,969 SHIB burned through ShibaSwap since its launch in July 2021
- Over 120 billion SHIB burned through NFT projects
The SHIB burn rate started off very quickly but has slowed down over time. For example, over 400 trillion SHIB were burned in November 2021 right after the peak of the “SHIB frenzy.” But in September 2022, only about 70 billion SHIB were burned. Still, billions continue to be burned every month through the various mechanisms.
SHIB burn rate per month in 2022:
| Month | SHIB Burned |
|---|---|
| January | 115,113,046,455 |
| February | 168,563,949,719 |
| March | 299,997,445,453 |
| April | 458,997,659,008 |
| May | 70,394,757,129 |
| June | 42,573,801,820 |
| July | 70,623,727,926 |
| August | 92,024,203,757 |
| September | 67,592,696,417 |
So while the burn rate has decreased from the initial frenzy, billions of SHIB continue to be burned every month through activities like using ShibaSwap and community burn initiatives.
What is the impact of burning SHIB?
By removing a portion of SHIB tokens from circulation, the idea is that it makes the remaining tokens more valuable and scarce. If demand for SHIB remains the same but supply is now lower, basic economics suggests that the price per token should increase.
However, despite over 400 trillion SHIB being burned so far, the price has remained volatile and has not seen a sustained increase. Still, supporters argue that the burns do provide fundamental value. The hundreds of trillions of tokens burned equals billions of dollars removed from the circulating supply. And the SHIB community remains committed to continuing the burn until it makes a meaningful dent in the overall supply.
Could SHIB reach $0.01 through burning?
SHIB supporters on Reddit and other social platforms often talk about the possibility of SHIB reaching $0.01 if enough coins are burned. At $0.01, the market cap of SHIB would be about $5.5 trillion given the current supply. That would make SHIB worth more than double Apple and Microsoft combined!
Realistically, SHIB reaching $0.01 any time soon is virtually impossible. Even with trillions burned, getting to $0.01 would likely require burning 99% or more of the current supply. Unless demand for SHIB were to increase exponentially, burning half the supply would likely only double the price at best.
For SHIB to reach $0.01, one or more of the following would need to happen:
- Burn 99%+ of the current supply of tokens
- Global adoption of SHIB increases exponentially
- Major exchange listings like Coinbase cause a surge in demand
- Shiba Inu developers create new burning mechanics
While it reaching a penny is not feasible in the near future, if the SHIB community remains committed to burning, the lower supply could help stabilize and gradually increase the price over the long-term.
Conclusion
SHIB is actively burning coins through several different mechanisms, most notably by sending tokens to inaccessible “dead” wallet addresses. Over 400 trillion SHIB have been burned so far, putting a dent in the massive initial supply. While this has not directly led to a major price increase yet, the lower supply does provide fundamental value. If the SHIB community remains diligent about continuing burn initiatives, it could help stabilize and gradually raise the price over time. But the chances of SHIB reaching $0.01 solely through burning remain extremely slim without a massive surge in demand.
