beincrypto.com
Shiba Inu’s Layer-2 blockchain, Shibarium, has recently witnessed a surge in Total Value Locked (TVL). It surpassed $1 million, marking the first time since September.
This milestone aligns with a significant increase in the burn rate of the $SHIB tokens observed over the past week.
Shibarium Total Value Locked Spikes
Shibarium’s TVL has dropped slightly to $1.03 million, showing an 8.98% decrease within the last 24 hours. This comes after reaching a high of $1.13 million on December 23.
On-chain data from DeFilLama shows that most of the total value locked on the Shibarium network comes from decentralized exchanges. MARSWAP and ChewySwap account for approximately $820,000 of the overall TVL on Shibarium.
Moreover, the Layer-2 blockchain has seen a spike in transactions throughout December. The network has averaged around 7 million daily transactions, elevating its total to 177 million from 2.2 million blocks. These numbers reflect Shibarium’s growth and adoption since addressing its initial launch issues in August.
Shiba Inu ($SHIB) Burn Rate Surges
Concurrently, the expansion of the Shiba Inu ecosystem coincides with a remarkable spike in $SHIB’s burn rate. Over the past week, a staggering 97% increase in the token’s burn rate has resulted in over 17 billion $SHIB tokens being withdrawn from circulation.
The burnt tokens have surpassed 410 trillion $SHIB, accounting for nearly half of Shiba Inu’s total supply. Token burns typically aim to reduce the circulating supply of a coin. A decrease in supply can theoretically lead to scarcity, potentially driving up the price if demand remains constant.
As the total number of tokens in circulation decreases, there has been a substantial decrease in $SHIB available on exchanges. On-chain data shows that over 8 trillion $SHIB have been withdrawn from known crypto exchanges since November, equivalent to $88 million. Typically, such transfers away from exchanges are seen as bullish, indicating investor reluctance to sell their tokens.
Despite the high burn rate and exchange withdrawals, $SHIB’s price has seen only a 33% increase over the past month. For comparison, Solana-based Bonk Coin surged by 373% during the same period. Still, technical analyst Ali Martinez said that if Shiba Inu continues to trade above the $0.0000103 support level, “the next stop for $SHIB could be $0.0000140.”