Burning tokens and sending them to inactive wallets has become important in the Shiba Inu ecosystem. Over the years, the community has actively engaged in regular token burns. However, these initiatives have had limited influence on the price. Consequently, the network has proactively integrated a burn mechanism into Shibarium to address this issue.
Shibarium, a layer-2 blockchain network, recently launched its beta version. As part of this release, the network announced that it would burn trillions of SHIB tokens annually. Although Shibarium is still in its beta stage, the burn mechanism is currently being implemented. A sneak peek of the user interface (UI) was shared on Twitter, giving users a preview of what to anticipate. A well-known community member, SHIB INFORMER, shared a glimpse of the Shib burn mechanism on Shibarium.
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What Does This Mean For SHIB With BONE as Shibarium’s Central Token?
Repeatedly, it has been disclosed that BONE will serve as the main token utilized in Shibarium. Consequently, many speculate that the burn mechanism may potentially favor BONE more than SHIB. Nevertheless, the documentation of Shibarium sheds light on the process, providing a clear understanding of how it operates.
When a user makes a transaction on the Shibarium network, the initial fee is locked in a contract for security purposes. At this stage, the validator receives a priority fee. Of the total cost, 30% will be used to maintain the network, ensuring its smooth operation. The remaining 70% will undergo a burn mechanism, which means it will be permanently removed from circulation.
After a specific amount of BONE tokens has been gathered in the burn contract on Shibarium, users are allowed to start the burn process. As a result, the accumulated BONE tokens are transferred to Ethereum’s Layer 1. On Layer 1, an automatic conversion occurs where the BONE tokens are transformed into SHIB tokens.
Once the burn process is initiated on Shibarium, the SHIB tokens are burned by invoking a contract function, resulting in their permanent removal from circulation. This process takes place smoothly once activated.
Although the unveiling of the mechanism’s user interface generated excitement on Twitter, it did not have any impact on the prices of SHIB or BONE. SHIB experienced a decline of 2.07% in the last 24 hours, while BONE was being traded at $0.7160, with a daily decrease of 3.83%.