Shiba Inu, at the forefront of blockchain discussions, saw its community experience a significant change in token dynamics. This occurred when Shib CoOp, an emerging Metaverse real estate project, declared a substantial 97 million SHIB token burn on Shibarium, an L2 blockchain platform that operates on the Ethereum network.
This strategic move underscored the potential of Shibarium and raised the anticipation of more SHIB token burns in the future.
Shibariumscan, the blockchain explorer for the Shibarium network, duly confirmed that the token burn event occurred precisely at 12:32 (UTC). However, questions have arisen regarding its genuine impact on the circulating supply of the SHIB token.
Shiba Inu: L1 and L2 Token Dynamics Explained
The core of the issue centres around the differentiation between L1 and L2 networks. Ethereum serves as the primary L1 network, acting as the foundational layer. Conversely, Shibarium functions as an L2 platform tethered to Ethereum. However, a crucial distinction arises: burning Shiba Inu tokens on Shibarium doesn’t necessarily equate to eradicating an equal number of SHIB tokens on the Ethereum network.
Shibburn, a community-driven burn tracker, quickly clarified this nuance, emphasizing that burning a token like SHIB on an L2 network does not eliminate the original token on the L1 chain. Essentially, the original Ethereum-based token represents what gets burned on L2. Ethereum has designated burn addresses, and for a token to be genuinely considered “burned,” it must originate from the same contract as these addresses.
Any Impacts on SHIB?
Notably, the core Shiba Inu team and their marketing lead, Lucie, have not officially shared their viewpoints. Additionally, questions about the need for a bridge to synchronize SHIB burns between L1 and L2 remain unanswered.
Amidst these ongoing discussions, Shiba Inu’s trading value lingers at $0.00000674, residing just below the $0.00000715 threshold of the descending triangle.