The recent introduction of Shibarium, a Layer 2 solution for Shiba Inu (SHIB), has ignited conversations within the cryptocurrency community.
L2 Beat recently featured Shibarium, shedding light on its operational framework as elucidated by one of its main developers, highlighting its distinctive sidechain architecture.
Simultaneously with its escalating secured value and burgeoning on-chain activities, Shiba Inu’s token burn rate has surged in the past 24 hours.
Shibarium’s Unconventional Framework: A More Resilient Layer 2 Protocol?
As per insights from a developer of the Shiba Inu L2 network, Shibarium distinguishes itself from traditional Layer 2 (L2) rollups that frequently rely on centralized entities or feature extended withdrawal timelines by functioning as a sidechain integrated with Ethereum (ETH).
This arrangement enables Shibarium to operate with its unique set of validators and checkpoints while capitalizing on Ethereum’s security through periodic anchoring mechanisms.
The developer expounded on this arrangement, remarking,
“In contrast to optimistic rollups, which mandate a seven-day withdrawal challenge period, sidechains run independent validators and checkpoints with Ethereum’s security bolstered through regular anchoring. This structural design, in my opinion, offers enhanced security.”
Furthermore, the ShibOS infrastructure incorporates diverse security measures, including a hybrid optimistic/ZK-based settlement model, with the goal of rectifying the shortcomings associated with optimistic rollups.
Secured Value and Network Operations
Data furnished by L2 Beat indicates a substantial surge in the total value secured by Shibarium over the previous year. As of December 2, 2024, the L2 protocol has safeguarded over $6.4 million, showcasing a consistent upward trajectory.
The Shiba Inu L2 encountered an initial upsurge in mid-2024 as adoption swelled, followed by a phase of stabilization where the secured value hovered above $3.33 million for multiple months.
Presently, the secured value marginally exceeds $3.5 million, marking a decline of nearly half from its peak last December.
Spiking Burn Rate for Shiba Inu
Another pivotal metric illuminating Shibarium’s impact is Shiba Inu’s burn rate, which has surged by a remarkable 786.90% in the preceding 24 hours up to the current time of reporting.
Over 31,010,900 SHIB tokens have been incinerated within the recent day, underscoring heightened network productivity and a diminished circulating supply. Sustained at this pace, such rapid token burns could fortify SHIB’s long-term price stability.
With the escalation of transactions on Shibarium, the burning of Shiba Inu tokens is anticipated to accelerate, further depleting the supply and potentially inducing price appreciation in the long haul.
Shiba Inu’s Price Dynamics: Decisive Moment
Shiba Inu’s price trajectory has trended downwards of late, trading at $0.00001751 at the present time, marking a daily dip of 0.51%.
However, technical analysis has identified critical support and resistance thresholds.
The 50-day moving average stands at $0.00002168, whereas the 200-day moving average hovers at $0.00001929, affirming a bearish outlook.
If the $0.00001700 support level holds, Shiba Inu might stabilize; otherwise, a further downturn could ensue. A breach beyond $0.00002200 could hint at a potential recovery.
Despite downward price pressure on Shiba Inu, the expanding adoption of Shibarium and a consistent burn rate could potentially reverse this prevailing trend.