Shiba Inu ($SHIB), an Ethereum based memecoin, has recently surpassed Avalanche ($AVAX), Ethereum’s rival, in market capitalization, reaching $11 billion compared to $10.8 billion for AVAX. This development has created a wave of excitement amongst the memecoin community.
🚨NEW: $SHIB ($11B) flips $AVAX ($10.8B) in market cap pic.twitter.com/ecDr7L0o3d
— Cointelegraph (@Cointelegraph) October 29, 2024
The Need of Token Burning
This shift largely is because of the token burning of 324 million memecoin tokens. Token burning reduces the circulating supply and increases scarcity of the token. This potentially enhances value over time.
Token burning is a common practice in the cryptocurrency, aimed at boosting demand by decreasing the token supply. As fewer tokens are available, the remaining ones may become more valuable if demand remains steady or rises. Historical data supports this, for instance, Binance Coin (BNB) experienced significant price increase following its quarterly burn.
At press time, the price of $SHIB is $0.00001867 with a surge of 9.2% in the past 24 hours. This surge is all because of the token burn that took place recently.
Previous $SHIB token burning
The Ethereum based memecoin has previously burned tokens with over 410 trillion tokens removed from the circulation since its launch in 2020, representing about 41% of its total supply. The first major burn occurred in June 2021 when Ethereum’s Vitalik Buterin burned 41% of the total supply, significantly boosting the memecoin’s popularity and market perception.
The recent burn by the memecoin reflects a commitment to creating a leaner ecosystem, which could lead to long-term price appreciation if sustained over time. This strategic move not only positions the memecoin favorably against competitors like AVAX but also demonstrates the potential of burning mechanisms in shaping cryptocurrency markets.
Also Read: ConsenSys Cuts 20% Staff, CEO Cites SEC Legal Battles
Credit: Source link