Vitalik Buterin, the co-founder of Ethereum, has burnt 90% of his Shiba Inu assets. This is around 40% of the entire Shiba Inu tokens in circulation.
Buterin has also stated that the remaining 10% of his holdings will be donated to charity. He communicated those thoughts in a note attached to an ether transaction created on the evening of May 16.
According to Buterin, he was burning and donating the coins because that was the only option. He had received 50% of the entire Shiba Inu tokens in circulation from the coin’s creators. According to him, his action of ditching the tokens would be the only way for him to avoid being scrutinized every time he makes a transaction in Shiba Inu. Buterin stated on the note,
“I’ve decided to burn 90% of the remaining Shiba tokens in my wallet. The remaining 10% will be sent to a (not yet decided) charity with similar values to CryptoRelief (preventing large-scale loss of life) but with a more long-term orientation.”
Vitalik Buterin doesn’t want the power
Buterin urged coin creators to stop the practice of sending large amounts of tokens to people and charities without consulting with them first. In his note, Buterin stated that “I don’t *want* to be a locus of power of that kind. Better to just print the coins into the hands of a worthy charity directly (though do talk to them first).”
After burning the coins, those Shiba Inu tokens will no longer be in circulation. In the crypto market, ‘burning’ means sending the tokens to a public address that cannot be accessed. This means that the tokens will now stay there and cannot be used.
The 40% Shiba Inu tokens that have been burned represent around 410 trillion coins with a value of around $7 billion.
After the announcement by Buterin, the value of the coin increased by more than 40% to reach $0.00001953. Data from CoinMarketCap shows that in the past 24 hours, the coin’s value has increased by around 2% and is now trading at $0.00001713 as of the time of writing.
Before the recent burning of SHIB tokens, Buterin had last week donated 50 trillion Shiba Inu tokens worth around $1 billion to CryptoRelief. CryptoRelief is a crypto-based charity in India created by Sandeep Nailwal, the co-founder of Polygon, to help battle the deadly wave of COVID-19 in India. However, Buterin has stated that the promised 10% donation would not be directed to the relief fund.
Buterin further praised SHIB tokens stating,
“I’ve actually been impressed by how the dog token communities have treated the recent donations! Plenty of dog people have shown their generosity and their willingness to not just focus on their own profits but also be interested in making the world as a whole better.”
The majority of the crypto community praised Buterin for how he has handled the situation. The Shiba Inu team also took the development positively and stated that the move had made a significant impact on the coin’s trajectory.
Impact on Price
Buterin’s move has reduced the supply of SHIB tokens by 40%. This means that the demand for the tokens could push its prices even higher. However, shortly after Buterin’s note became public knowledge, the value of SHIB tokens dipped by 37% as other individuals started dumping their holdings. The dip only lasted for a short while, and the token has gone back to hitting the headlines with its appreciating value.
The Shiba Inu team has also stated that they were fairly certain the value of the token would increase again soon. The team encouraged SHIB investors by telling them that the current dip was only a temporary issue, and that market forces would soon assert themselves. They also affirmed that their project will stand all future tests, despite Vitalik Buterin’s withdrawal from the project.
“The SHIB project has always stood on its own merits. We have never promised to be more or different than what we are. For those of you who have held, we thank you for sharing our vision. As huge as this moment is, remember that it is only the beginning.” Stated the team in its official post.
SHIB and Dogecoin – how doggie meme coins soared
Shiba Inu is a token that was inspired by Dogecoin. It has gained around 1,000% in the past week. According to the token’s website, SHIB is an “experiment in decentralized spontaneous community building.” Binance, the largest global exchange, listed the SHIB token last week – an indication that the coin was doing well even before Buterin’s coin burn intervention.
SHIB has marketed itself as the ‘DOGE killer,’ and its price has increased by almost 900% in two weeks. Its all-time high stands at $0.00003791, achieved on May 10 after being listed on major exchanges such as Huobi and Binance.
The surging value of SHIB tokens in recent weeks has shown that crypto online communities play a significant role in pushing up the prices of cryptocurrencies. Because of the role of the crypto community, SHIB has increased by more than 2,200% in the past month alone.
SHIB here to stay… or gone tomorrow?
SHIB price hike has happened at the same time as Dogecoin’s. The two tokens have surpassed expectations and risen from being a joke to becoming dominant meme coins that may become a permanent fixture in the crypto market.
However, in as much as meme coins are becoming highly popular, the tokens are very risky to invest in because they much in the way of utility to offer, unlike top tokens Bitcoin and Ethereum. Because of this limitation, these tokens’ prices risk soaring very high only to be followed by a deep market correction occurs – although the same could be said for many other cryptoassets.
Because of this, it is advisable that you invest cautiously in meme coins. Holding large amounts of the token could lead to massive losses caused by a sudden price dip.
Similarly to the other cryptocurrencies in the market, it is also expected that Shiba Inu tokens and Dogecoin will soon be subject to further development efforts which should see their utility expand beyond today’s narrow possibilities, and this should help to reduce the high volatility of these tokens.
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Author: Ali Raza