The Shibarium network, a key component of the Shiba Inu ecosystem, has recently witnessed an eye-catching surge in transaction fees. Over the past five days, the average amount spent on Shibarium transactions has increased from 0.0026 BONE on July 5 to 0.014 BONE by July 10. This data is from Shibariumscan.
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BONE, another native token of Shiba Inu, plays a major role in the ecosystem's blockchain by covering transaction fees, thereby contributing to the burning of SHIB tokens. This process results in a reduction of the total supply of SHIB, which directly affects its scarcity, inflation and price.
Source: Shibariumscan
Worryingly, despite increased transaction fees, the number of transactions on Shibarium has decreased significantly, from 7,409 daily transactions on July 5 to 3,400 in the last 24 hours.
Furthermore, the total value locked in Shibarium has also decreased. As many know, the TVL metric represents the total value of all assets locked in a blockchain's smart contracts, and it is therefore a key indicator of the overall health and adoption of the network.
Source: DefiLlama
Thus, the current TVL for Shibarium is $1.57 million, representing a decline from the $3.79 million recorded at the end of March.
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The decline of Shibarium can probably be attributed to the unimpressive performance of Shiba Inu token (SHIB). The popular meme token, which ranks 11th among all cryptocurrencies in terms of market capitalization, is not even third in its sector in terms of trading volume.
This lack of trading activity suggests waning interest from the community, which could be impacting Shibarium's transaction numbers and TVL.