Shiba Inu [SHIB] is facing a critical juncture with the significant surge of 2,024% in gas fees on its layer 2 network, Shibarium. This surge raises crucial concerns regarding the future trajectory of the SHIB token.
Potential Challenges Presented by BONE on Shibarium
Recent data from ShibariumScan indicates a remarkable milestone for Shibarium, with transaction volume experiencing a 70% surge from 4,537 to 7,715, and active accounts witnessing a staggering 157.14% increase from 42 to 108.
BONE, the native token of the Shiba Inu ecosystem, plays a pivotal role in facilitating transactions on the Shibarium network. Essentially, transactions on Shibarium are conducted using BONE.
Consequently, there has been a notable surge of around 3% in the value of BONE over the last 24 hours, currently standing at $0.425079. This upswing accentuates an ongoing challenge posed by SHIB’s deflationary model, which is intended to regulate the token supply.
To provide context, SHIB developers employ a regular token burning mechanism by sending tokens to inaccessible wallets, a strategy aimed at influencing token value.
On Shibarium, users exchange a portion of BONE tokens into SHIB, sending them to inactive wallets. However, the substantial spike of 2,024% in transaction fees might dissuade stakeholders, potentially impacting SHIB’s value indirectly.
Current Positioning of SHIB
SHIB has been recording consistent bullish movement on the daily price chart, marking an over 5% increase in the past week. Nonetheless, much of this positive momentum can be attributed to Bitcoin’s recent upward trend over the past four days.
Notably, with only 240,000 SHIB tokens burnt – a dramatic 85% decrease from the previous figure of 1.7 million – the news of elevated gas fees on the Shibarium network could be a cause for concern among stakeholders.
This concern may be further validated if the pace of transactions on Shibarium decelerates, resulting in fewer SHIB burns.
Conversely, should the network activity sustain its appeal despite the elevated gas fees, the SHIB community might have fewer reasons for apprehension.
However, despite the network achieving new highs with a total of 416.785 million transactions, the recent transaction volume has notably declined—plummeting from 30K in mid-August to 11K presently.
In essence, prospective investors may be discouraged from engaging with Shibarium due to the rising transaction costs. As observed by CryptoCrypto, a prolonged continuation of this trend could detrimentally affect the long-term value of SHIB.
Presently, the attractiveness of SHIB is contingent on Bitcoin’s ability to sustain the $64K threshold. Any potential slowdown in SHIB burns could trigger a retracement.
Ultimately, while the Shibarium network celebrates its milestones, the surge in gas fees could potentially impact SHIB’s future outlook if corrective actions are not promptly undertaken.