Editor’s note: This article was updated on Oct. 21 to correct the number of tokens that Vitalik Buterin burned and to correct the current circulating supply of Shiba Inu.
Shiba Inu’s (CCC:SHIB-USD) rise to the full attention of the crypto world has caught the admiration of its followers — and the absolute ire of its critics. A bevy of knocks against the altcoin network have come its way in the last six months, beginning right around the time it began a steep vertical climb to its all-time high in the spring. Since then, any crypto investor aware of Shiba Inu has a firm stance on it, be it bullish or bearish. Now, the network has caught flak from none other than investing superstar Michael Burry, who is not afraid to speak negatively on the altcoin. But, can a Shiba Inu coin burning strategy invalidate the harsh words of Burry and other SHIB bears?
Michael Burry is becoming vocal on the altcoin, and it’s not in the way SHIB investors would like. The investing star, known for profiting off of the subprime mortgage crisis of the late 2010s, emerged this week to call SHIB “pointless.” More specifically, Burry targeted Shiba Inu’s monolithic supply of 1 quadrillion tokens:
“Just saying, one quadrillion seconds is about 32 million years. One quadrillion days is 2.7 trillion years, or all of time, from the beginning of the universe, multiplied by 71,000. In other words, pointless.”
Can Shiba Inu Coin Burning Fix the Coin’s ‘Pointlessness?’
One thing investors are becoming attentive to when it comes to these speculative altcoins like Shiba Inu is tokenomics. Often, many of these token ecosystems thrive on supply and demand, driven through a token-burn function. When transactions occur, protocols often remove small amounts of tokens from the trade. They then deliver it to a “burn” address, under the label of being a transaction fee. The address is a dead wallet, with no access given to anybody, in order to permanently remove those tokens from the circulating supply.
It’s through a Shiba Inu coin burning strategy that SHIB can render criticism like Burry’s invalid. And while the network has used this approach twice, it can benefit from a longer-term strategy.
When SHIB was created, half of the 1 quadrillion supply was gifted to the wallet of Ethereum (CCC:ETH-USD) co-founder Vitalik Buterin. Buterin went on to burn 90% of his holding, effectively eliminating more than 400 trillion SHIB. The rest was donated to a coronavirus relief charity run by members of the Polygon (CCC:MATIC-USD) network’s team. That was the first burn, which was completely unanticipated.
More recently, the network instituted its own purposeful coin burn, in conjunction with a blockchain project called PERL (CCC:PERL-USD). Using Shiba’s ShibaSwap exchange, users could conduct trades of PERL tokens and send SHIB to a burn address. The token burn amounted to about $25,000 worth of SHIB, which at the time of announcement was just under 360 million coins.
That’s still just a drop in the well in terms of size. According to CoinMarketCap, the current circulating supply is just under 400 trillion, a number which critics like Burry would still turn their nose up at. However, if it were to take cues from its peers, the network can easily silence the crowd. It certainly doesn’t hurt that it would also catalyze gains through supply and demand as well.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
