Shiba Inu’s ($SHIB) Market Capitalization Overtakes That of Avalanche ($AVAX)
In what seems to be solar eclipses on a sunny day, Shiba Inu ($SHIB), an Ethereum based memecoin, has seemingly eclipsed Avalanche ($AVAX), Ethereum’s competitor, in capitalization, which stood at $11 billion against AVAX’s $10.8 billion dollars. Such news created a storm among the memecoin followers.
The primary cause for this shift is the burning of 324 million memecoin tokens.
A well-known and widely-used example within crypto, token burning works to appreciate the value of the assets through balance knock out. Since the tokens are knocked out the balance availability falls which increases value if demand remains the same or increases. In terms of price history, this can be extrapolated from the perspective of a Binance coin (BNB) which sore extremely high prices post-burn quarterly.
At the time of writing, the price of $SHIB is at $0.00001867, boasting a slight increase of 9.2 percent over a 24 hour period. This increase of token price has all the aspects of the token burn which the asset had to undergo recently.
Ever since its launch, the memecoin which is based on the ethereum blockchain has previously burned tokens with over 410 trillion tokens removed from the circulation, which is around 41 percent of its total supply, since it started in 2020. The last major burn was in June 2021 when the CEO of Ethereum, Vitalik Buterin, burned 41 percent of the entire quantity, which enhanced the memorandum currency’s recognition more so the information in the market.
Such recent actions by the memecoin are indicative of a recent burn, but it also indicates a willingness to operate within a more rational ecosystem which if maintained over the long term, could result in price appreciation. The strategic decision does place the memecoin in a very competitive position, as far as AVAX is concerned, but even more, it demonstrates the possible market-shaping capabilities of burning mechanisms in cryptocurrency markets.
