Shibarium is an Ethereum layer 2 solution that can be called one of the most hyped crypto projects of 2023 and is expected to introduce higher network speeds and lower transaction costs to the Shiba Inu ecosystem.

After months of beta testing, Shiba Inu developers finally announced on August 16 that the Shibariun mainnet is now live. However, contrary to popular predictions, Shiba Inu’s most famous token, SHIB, seems to have taken a nosedive in this development.

Shibarium Ethereum Bridge Failure, SHIB Maintains Bearish Pattern

So far, the launch of Shibarium has had a negative impact on SHIB, with the token losing 6.86% of its value in the past 24 hours according to data from CoinMarketCap. Prior to SHIB’s drop today, the token had been having a poor performance overall this week, falling from $0.00001059 on Monday to $0.000009527 on Wednesday.

Currently, SHIB’s losses following Shibarium’s launch can be attributed to technical issues with the highly anticipated project. According to a post by Whalechart on X, over $1.7 million worth of ETH is currently stuck on the Shibarium bridge. This development has caused a lot of panic among investors.

Furthermore, it seems likely that the assets will be unrecoverable after a message circulated on social media that appeared to be from Shiba Inu developer Shytoshi Kusama.

Meanwhile, it’s worth noting that SHIB isn’t the only Shiba Inu token facing significant selling pressure, with BONE and LEASH also down 15.48% and 22.59% respectively in the last day.
 

Over $1.7 million worth of ETH was reportedly transferred to Shib’s Layer 2 bridge (called “Shibarium”) and cannot be recovered. pic.twitter.com/lLDXsNvAx9

— Ahmad (@Ahmadrobert_) August 17, 2023

 

Will Shibarium be a hindrance to the Shiba Inu ecosystem?

Shibarium aims to enable various projects in the Shiba Inu ecosystem (such as Shib Metaverse, Shibaswap DEX, and Shiboshi NFT projects) to operate at higher speeds while providing lower transaction costs for users.

Additionally, all Shibarium transactions result in the destruction of SHIB, acting as a deflationary mechanism for the token. Due to these features proposed by the Shibarium project, it is widely expected that Layer 2 solutions can increase the adoption of SHIB and other Shiba Inu native tokens, thereby increasing market prices.

There are many positive signs supporting this prediction, with the SHIB token having surged in the past few months on any news regarding Shibarium’s progress.

In fact, Shibarium launched on Wednesday with 21 million wallets created, showing high interest from users. However, recent issues with the Ethereum bridge have left Shiba Inu investors very concerned about whether the Shibarium project can live up to its potential.

Still, it's too early to call the project a failure, especially considering the Shiba Inu team has yet to make an official statement regarding the challenge.

As of writing, SHIB is trading at $0.000009295, up 0.37% in the last hour. Meanwhile, the token’s daily trading volume has dropped by 0.42% to $431.32 million.