The team behind the popular meme coin Shiba Inu has launched a new burning mechanism designed to decrease the token’s circulating supply while rewarding holders with a yield-generating token.
Shiba Inu was launched in 2020 by pseudonymous developer Ryoshi as an “experiment in decentralized spontaneous community building.” SHIB can be seen as an Ethereum-based counterpart to Dogecoin (DOGE), the crypto industry’s oldest and most well-known meme coin.
The Shib Burning Portal went live over the weekend, with the team tweeting on Monday that over 8 billion tokens had already been burned in the first 24 hours.
The amount of burnt tokens has grown to over 11.7 billion by press time.
In the first 24 hours over 8 BILLION $SHIB was burned through the SHIB Burn Portal!
🔥Burn $SHIB and earn passive income at https://t.co/jSnPG8SEoF!
IMPORTANT: Read disclaimer at https://t.co/D91bVoMUtz pic.twitter.com/GmhxNdZAvi
— Shib (@Shibtoken) April 25, 2022
Explaining the new burn mechanism, the developers said that “tokens are transferred to a burn address, i.e., a wallet from which they cannot be retrieved.”
“Once a token is sent to a burn address, it's gone forever. A burnt cryptocurrency has a reduced supply, making the tokens scarcer,” reads the description.
SHIB burning incentives
The Shib Burning Portal was launched in collaboration with Ryoshis Vision (RYOSHI), an ERC-20 token aimed at supporting the growth of the SHIB ecosystem.
Users who decide to burn their SHIB tokens are given another token called burntSHIB, which pays rewards in RYOSHI tokens at a varying rate.
According to the developers, 0.49% of all RYOSHI transactions will be distributed to the owners of burntSHIB tokens.
A more indirect incentive is reducing Shiba Inu’s circulating supply, something that could pay off in the long term as increased scarcity may—theoretically, but not necessarily—translate into the coin’s appreciation.
“A scarcity can increase the price of the tokens, benefiting investors, yet it is not always guaranteed,” said the team.
At the time of writing, SHIB is down 2.13% over the last day, trading at around $0.00002364 per CoinMarketCap.
“The Shiba Inu Community or as commonly known and nicknamed ‘The Shib Army,’ has been quite vocal and providing ongoing feedback that would relate to creating a systematic method in which scarcity can increase, while pushing the potential to grow the communities wealth in their investment,” reads the project’s website.
At the project's launch, a total of 1 quadrillion SHIB were minted. The project developers sent around half of the total supply to Vitalik Buterin, the co-founder of Ethereum, in May 2021.
Ryoshi explained that "there is no greatness without a vulnerable point and as long as [Buterin] doesn’t rug us, then SHIBA will grow and survive."
Buterin subsequently burned 410.24 trillion SHIB—90% of his holdings, worth around $6.7 billion—and donated the remaining 10% to charity. He argued that if he did anything with the SHIB tokens he had been gifted, it could result in unnecessary speculation.
According to SHIB token tracker Burn Dashboard, more than 410 trillion SHIB, or 41% of the total token supply, has been burned.