If you follow the cryptocurrency news, then you have certainly heard that Shiba Inu (SHIB) has created a portal of burn. What does this mean concretely? Why do we have to burn cryptocurrencies when we are actually selling them? We answer all these questions in this article.
The burning portal of shiba inus is a feature that allows users to send their SHIB tokens to a burning address. This is a wallet from which SHIBs can no longer be retrieved, which means that once the tokens are sent to this address, they can never be retrieved again. They will be gone forever.
Why burn tokensand therefore destroy cryptocurrency coins?
The chosen destruction of cryptocurrencies, reduces the amount of tokens in circulation. This increases the scarcity and value of the crypto. The introduced mechanism reduces the total supply in circulation, making tokens more scarce.
In theory, this can benefit investors. A scarce asset tends to be preferred over an asset that has unlimited supply or a considerable rate of inflation. Of course, this is all theoretical, and nothing is guaranteed. Fixing or reducing supply does not necessarily result in an increase in value. This means that the success of the portal of burn remains to be demonstrated.
The motivations behind the portal
The decision of the team behind the portal was strongly supported by the community.
“The Shiba Inu community, commonly referred to as “the army shib”, focused on the combustion process and encouraged the creation of a systematic method to increase scarcity, while increasing the wealth growth potential of communities in their investment”, can we read on the official website.
To reward users who decide to burn their tokens, the team offers an incentive in the form of potential passive income. Those who burn Shibas will receive a token called burntSHIB. The owners of the latter will receive token rewards RYOSHI. (RYOSHI is the anonymous creator of the Shiba Inu Project.) Approximately 0.49% of all RYOSHI transactions will be distributed to owners of burntSHIB tokens.
Holders can now permanently destroy their tokens, reducing the circulating supply while enjoying passive income opportunities. This ongoing process should ultimately lead to an increase in the value of SHIB. The whole question is: how high will this memecoin ?
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Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in 2017 on a few cryptos only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay with my pen information relating to this ecosystem.