#shiba-inu: dose #tuch 1 dollar or not.. Why Does Shiba Inu Have Token Burning?

Shiba Inu (CRYPTO: SHIB), created in August 2020 by Ryoshi (a pseudonym) and others, gained significant attention in May of the following year when its founder(s) sent half of the supply to Ethereum (CRYPTO: ETH) co-founder Vitalik Buterin. Vitalik decided to burn 90% of his SHIB holdings, which accounted for more than 40% of the total supply (approximately 410 trillion coins).

The act of burning SHIB tokens by Vitalik caused a surge in Shiba Inu prices, nearly a 40% increase. The Shiba Inu community decided to continue burning tokens in an effort to increase the value of the remaining tokens and reward loyal holders. However, the sheer size of the total supply posed a challenge, as too many tokens were chasing too few dollars.

Reasons For Token Burning

There are several reasons why cryptocurrency projects engage in token burning despite the seemingly counterintuitive act of destroying their own tokens. These reasons include:

Scarcity: Burning tokens increases the rarity of the remaining tokens, creating a sense of scarcity that can potentially drive up their value.

Inflation Control: Token burns help maintain a stable and predictable inflation rate by reducing the overall supply of tokens in circulation.

Demand and Value: Burning tokens can drive up demand for the remaining tokens, potentially increasing their value and attracting more investors and speculators.