The advent of Shibarium, the Layer 2 solution for Shiba Inu [SHIB], has generated discussions within the cryptocurrency community.
Recently debuted on L2 Beat, the inner workings of Shibarium have been elucidated by a primary developer, bringing attention to its distinct sidechain architecture.
Alongside the rise in its secured value and escalating on-chain activity, Shiba Inu has experienced an uptick in its token burn rate over the past 24 hours.
Shibarium’s Novel Structure: A More Robust Layer 2 Solution?
As per insights from a developer of Shiba Inu’s Layer 2, Shibarium operates as a sidechain constructed on the Ethereum [ETH] network, diverging from traditional Layer 2 rollups that often rely on centralized entities or entail prolonged withdrawal timelines.
This operative style enables Shibarium to function independently with its validators and checkpoints while capitalizing on Ethereum’s security via intermittent anchoring.
The developer elaborated on its structure by stating,
“Sidechains maintain their validators and checkpoints while leveraging Ethereum’s security through periodic anchoring. In my perspective, this setup offers heightened security compared to optimistic rollups, which necessitate a seven-day challenge interval for withdrawals.”
Furthermore, the ShibOS system integrates various security protocols, including a hybrid settlement model that combines optimistic and zero-knowledge-based approaches, with the aim of mitigating the inefficiencies associated with optimistic rollups.
Secured Value and On-Chain Activity
Statistics from L2 Beat demonstrate a substantial surge in the total value secured by Shibarium over the past year. As of December 2, 2024, the Layer 2 solution has secured over $6.4 million, showcasing a consistent upward trajectory.
Shiba Inu’s Layer 2 witnessed an initial surge in mid-2024 due to increased adoption, followed by a stabilization phase where the secured value remained above $3.33 million for several months.
Presently, the secured value hovers around $3.5 million, indicating a nearly 50% decrease from the peak observed in December.
Notable Surge in Shiba Inu’s Token Burn Rate
Another crucial metric reflecting Shibarium’s impact is Shiba Inu’s token burn rate, which surged by 786.90% in the previous 24 hours leading up to the present moment.
With over 31,010,900 SHIB tokens burned within a day, the heightened network activity and diminished circulating supply are evident. Sustained at this pace, the rapid token burn rate could bolster long-term price stability for SHIB.
As transactions proliferate on Shibarium, the pace of Shiba Inu token burn is anticipated to accelerate, further reducing the token supply and potentially ramping up price pressures in the long run.
Price Analysis of Shiba Inu: A Crucial Phase
Shiba Inu’s price has recently been on a downward trajectory, currently standing at $0.00001751, depicting a 0.51% daily decline.
Nevertheless, technical analysis highlights critical support and resistance levels.
The 50-day moving average sits at $0.00002168, while the 200-day moving average lingers at $0.00001929, affirming a bearish outlook.
If the support level of $0.00001700 holds, Shiba Inu may stabilize; otherwise, further declines might ensue. A breakout above $0.00002200 could signal a potential recovery.
Despite the downward pressure on Shiba Inu’s price, the increasing adoption of Shibarium and a sustained token burn rate could potentially reverse the prevailing trend.