According to U.Today, the Shiba Inu team has launched a burn portal for the Shibarium layer-2 solution. Token burning, a common practice in the cryptocurrency industry, aims to reduce the supply of a particular token. This method was notably implemented in Ethereum's network through the Ethereum Improvement Proposal (EIP) 1559 during the London hard fork in 2021. The upgrade introduced a 'base fee,' a mandatory fee determined by an algorithm based on network usage, which is always burned by the protocol. This move contributed to Ethereum's deflationary narrative.
Shibarium has adopted similar features with its Burn hard fork. Each transaction on Shibarium results in a base fee being locked in a burn contract. Once a sufficient amount of BONE tokens accumulate, users can initiate the burn process using the newly launched ShibTorch. Currently, users need at least 100 BONE tokens to start a burn. After connecting their wallets, users can see the exact amount of SHIB that will be burned and the transaction hash.
It is important to note that only 70% of the base fees will be burned, with the remaining 30% collected in the treasury. BONE tokens are exchanged for SHIB tokens via the Ethereum network, and these SHIB tokens are then removed from circulation. The introduction of the burn portal is expected to be a bullish catalyst for SHIB, as it could significantly reduce the token's supply. SHIB has seen a 0.8% increase over the past 24 hours, according to CoinGecko data.
