Shiba Inu’s layer-2 network, Shibarium, just hit a major milestone on Wednesday. The latest data shows that Shibarium has processed over 6.5 million blocks and is on the brink of reaching 420 million transactions. This development indicates that the network is brimming with activity, with investors clocking in and out of the layer-2 solution.
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Shibarium’s Milestones and Challenges
Shibarium also recently launched an in-burn mechanism that will automatically burn SHIB tokens and reduce the circulating supply. Since the network activity is nearing 420 million transactions, the fee collection will be higher. This will lead to more burns, sending Shiba Inu tokens to the dead wallet.
Slower Network Activity Compared to Other Blockchains
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That sounds good, right? But the reality is quite the opposite. Shibarium’s network activity is close to 420 million but is slower compared to the activity on other blockchain networks. The layer-2 solution was launched in August 2022 and has yet to breach 420 million transactions in two years.
Burn Mechanism’s Limited Impact on SHIB Price
I agree it’s a significant milestone, but the pace is slower and not on par with expectations. At this speed, it could take more than 100 years to burn 2% of the circulating supply through the built-in burn mechanism collected via user fees.
Therefore, Shibarium’s burn process might not be the solution to take SHIB’s price toward the $0.01 milestone.
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Shiba Inu: Shibarium Burn Portal Let’s Down Investors
Shiba Inu’s Shibarium burn portal was much talked about before launch, and investors were hopeful it could do wonders for SHIB. A portion of the gas fees collected in the BONE token is swapped to Shiba Inu to initiate the burns, which sends the money to the dead wallet.
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While the burns are going on as expected, the scale of the transactions is disappointing. For Shibarium to burn more SHIB tokens, the network activity on the layer-2 blockchain must increase rapidly.