- Engineers claim the Shiba Inu’s one-cent dream is impossible because of its slow growth.
- With over 1 trillion LUNC tokens burned, LUNC has not seen significant gains.
- SHIB Army and the LUNC community are exploring ways to increase the burn rate.
In the cryptocurrency world, the power of the community plays a vital role in the development and long-term value of a coin. Some outspoken cryptocurrency communities are doing their best to encourage developers, executives, and popular cryptocurrency platforms to send their cryptocurrencies to burn addresses, thereby removing tokens from the circulating supply.
Why burning more than 50% of SHIB is not enough
Shiba Inu (SHIB) and Terra Luna Classic (LUNC) have been at the forefront of cryptocurrency burning practices. Shiba Inu’s public layer 2 blockchain, Sibarium, burns accumulated fees from transactions on the chain, influencing the price of SHIB each time.
Shibarium L2 developers burned 93.5B SHIB on January 10, 2024, generating optimism in the community ahead of the much-anticipated Shibarium auto-burn mechanism. In 2023, the Shiba Inu community burned a total of 76.4 billion SHIB coins from circulation.
However, the remaining supply of Shiba Inu is 589,272,418,781,393, and the initial supply was capped at 999,982,348,139,765. 50% of the allocated supply was immediately sent to Vitalik Buterin, and the Ethereum founder donated 10% of the allocated supply to coronavirus relief efforts in India.
Commenting on the changing dynamics of SHIB, a computer systems engineer at X expressed his sorrow for the Shiba Inu community, commonly known as the SHIB Army. Comparing SHIB’s burn rate to LUNC’s, the engineer said the LUNC community is still “disgruntled” despite having more than 10x less remaining supply than SHIB.
How to accelerate SHIB and LUNC burns
The LUNC community has collectively burned 1.05T tokens out of a total supply of 6.78T. LUNC still holds 5.73T tokens. Binance, the leading cryptocurrency exchange by trading volume, burns LUNC every month, accumulating from relevant trading pair fees from the previous month.
Despite millions of coins being burned every day, the price increase has barely kept up with the LUNC burning efforts. Despite over 1T of LUNC coins being removed from circulation, the LUNC price is up exactly 3.8% from a year ago.
SHIB holders can expect automatic burns on Shibarium L2. The new SHIB burn system, scheduled to launch in late 2024, could theoretically burn billions of tokens per day, depending on the activity level on Shibarium L2.
Although a new automatic burn mechanism has been deployed on Shiba Inu’s ‘Puppynet’ testnet, it is still unknown when the Dog Coin’s custodians will be able to burn a certain amount of SHIB for every on-chain activity.
On the other side
- According to the token economics model presented on CoinGecko, the theoretical maximum supply of Terra Luna Classic (LUNC) is infinite.
Why this matters
Burning cryptocurrency can be an efficient way to maintain the token economy of a coin in a deflationary manner.
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