Can Shiba Inu replicate the burning of 410 trillion tokens by Vitalik Buterin?
Shiba Inu ($SHIB ) had an explosive year in 2021. One of the most important catalysts for the incredible rise of SHIB was the massive token burn by Vitalik Buterin. The co-founder of Ethereum received half of the total supply of SHIB at its launch. Buterin decided to burn 90% of the tokens he received. At that time, there was also substantial demand for SHIB. The drastic drop in supply and high demand led to one of the most historic price surges in cryptocurrency history. Many fans and investors are hoping for another burn similar to that of 2021. Let's analyze if it can happen again.
Currently, there are still around 589 trillion SHIB tokens in circulation. The enormous supply is a significant obstacle for the price of SHIB. If the asset reaches high price levels, its market capitalization would reach staggering figures. Reducing the supply of tokens is one way to boost the price of SHIB.
While a burn may be a simple solution, reducing the supply of the project is not. Many SHIB tokens are held in whale wallets. No single wallet has enough tokens to replicate Buterin's massive burn. The burn initiative would require the cooperation of many token holders. This is unlikely to happen.
The lead developer of Shiba Inu (SHIB), Shytoshi Kusama, also emphasized that burns alone will not drive the price of the asset. The project needs high demand to push prices.
Reports indicate that the SHIB team is working on a new burn mechanism. According to rumors, this mechanism could burn trillions of tokens per year. Even if the project burns between 2 and 3 trillion tokens per year, it would take a long time to burn 410 trillion tokens, as Buterin did.
