- Shiba Inu’s burn rate increased by 786%, reducing supply and potentially boosting long-term price stability.
- Shibarium secured $6.66 million, reflecting growing adoption and rising confidence in Shiba Inu’s Layer 2 expansion.
The recent listing of Shibarium, Shiba Inu’s [SHIB] Layer 2 solution, has sparked discussions in the crypto community.
Recently listed by L2 Beat, the mechanism of Shibarium has been explained by one of its key developers, drawing attention to its unique sidechain structure.
Alongside its rising value secured and increasing on-chain activity, Shiba Inu’s burn rate has increased in the last 24 hours.
Shibarium’s unique structure: A more secure L2?
According to one of the Shiba Inu L2 developers, unlike conventional Layer 2 (L2) rollups, which often rely on centralized operators or have prolonged withdrawal periods, Shibarium functions as a sidechain built on Ethereum [ETH].
This allows it to operate with its own validators and checkpoints, while leveraging Ethereum’s security through periodic anchoring.
The developer explained its design, stating,
“Sidechains operate their own validators and checkpoints/milestones while leveraging Ethereum’s security via periodic anchoring. In my view, this structure is more secure than optimistic rollups, which impose a seven-day challenge period for withdrawals.”
Additionally, the ShibOS system integrates multiple security mechanisms, including a hybrid optimistic/ZK-based settlement model, aiming to address the inefficiencies of optimistic rollups.
Value Secured and network activity
Data from L2 Beat shows that the total value secured by Shibarium has grown significantly over the past year. As of the 2nd of December 2024, the L2 has secured over $6.4 million, demonstrating a steady uptrend.
The Shiba Inu L2 saw an early spike in mid-2024 as adoption increased, followed by a stabilization phase where its value secured remained above $3.33 million for months.
Source: L2Beat
As of this writing, the value secured is around $3.5 million, declining by almost half from the peak it witnessed in December.
Shiba Inu’s burn rate skyrockets
Another key metric showing the impact of Shibarium is Shiba Inu’s burn rate, which has witnessed a 786.90% increase in the last 24 hours until press time.
Over 31,010,900 SHIB tokens have been burned within the last day, indicating heightened network activity and reduced circulating supply. If sustained, such a rapid burn rate could support long-term price stability for SHIB.
As more transactions are processed on Shibarium, Shiba Inu burning is expected to accelerate, further reducing supply and potentially increasing price pressure in the long term.
Shiba Inu’s price action: A critical moment
Shiba Inu’s price has followed a downward trend recently, trading at $0.00001751 at press time, marking a 0.51% daily decline.
However, technical analysis showed important support and resistance levels.
The 50-day moving average was at $0.00002168 while the 200-day moving average was at $0.00001929, confirming bearish sentiment.
Source: TradingView
Realistic or not, here’s SHIB market cap in BTC’s terms
If the $0.00001700 support level holds, Shiba Inu may stabilize; otherwise, further declines could follow. A breakout above $0.00002200 could indicate a recovery.
Despite Shiba Inu’s downside pressure, increasing adoption of Shibarium and a sustained burn rate could reverse this ongoing trend.
Source: https://ambcrypto.com/shibariums-rise-how-the-new-l2-impacts-shiba-inus-price-burn-rate/