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the past week, a staggering 97% increase in the token’s burn rate has resulted in over 17 billion SHIB tokens being withdrawn from circulation.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 On-chain data shows that over 8 trillion SHIB have been withdrawn from known crypto exchanges since November, equivalent to $88 million.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.”