Does burning Shiba Inu genuinely help to raise prices?

That's supposed to be the main benefit of burning Shiba Inu. So the theory goes: if you reduce supply, prices rise even if demand remains the same. If demand rises as supply is reduced, the price breakout can be explosive.

This happened in May 2021 when 41% of the entire Shiba Inu supply entered the burn address for the first time. Within two weeks, the Shiba Inu price pumped 50,000%. 

It turned $200 into $100,000 in the space of two weeks for early SHIB investors.

But what about in December 2022? Can we expect another 50,000% price pump?

Here's what a new analysis is saying.

Shiba Inu burn rate stalls in December 2022 after falling -99%

Just 352 million Shiba Inu tokens have been burned in December 2022. This is just 0.00006% of the circulating supply of SHIB.

It's not enough to create any significant price breakouts. 

But get this.

In May 2022, the Shiba Inu burn rate hit an unexpected 31 billion SHIB tokens – 0.005% of the circulating supply of SHIB. It's the best Shiba Inu has done since Vitalik Buterin burned 410 trillion SHIB in a single transaction the year before.

May this year coincided with the launch of the ShibaSwap burn portal. Shiba Inu holders could burn their own tokens in return for passive income. Sadly, the burn portal failed to deliver – but it's currently under development once again, and this time within the Shiba Inu lead development team.

If we're to see a burning-related price breakout in 2023, Shiba Inu needs to nail the burn portal this time around.

The #1 problem of burning Shiba Inu – it's not automatic

Hundreds of thousands of Shiba Inu investors are bullish about burning SHIB.

But there's just one problem: very few of them actually contribute to the burn rate. To burn Shiba Inu investors need to either send their tokens to one of three official burn addresses, or set up a project or business which burns SHIB from a % of profits.

Only $6,000 worth of Shiba Inu entered burn addresses last month. Meanwhile, more than $100 million worth of SHIB was traded each day.

Should Shiba Inu implement a burn tax?

New altcoins like EverGrow take advantage of this with a burn tax. Every time you buy or sell EverGrow, a 2% cut of the transaction is kept back to buy and burn EverGrow via smart contracts.

The mechanism burned more than 6% of circulating supply from EverGrow over the past year.

In September, EverGrow also created an NFT marketplace which sends 100% of its revenue towards buying and burning EverGrow. Nearly 1% of the circulating supply was burned in November thanks to this innovation.

Unsurprisingly, the EverGrow price pumped 43% and is set for explosive growth in 2023.

If you don't want to miss out, you can safely buy EverGrow using BNB or BUSD here: https://evergrowegc.com/ 

It's unlikely that Shiba Inu will implement a burn tax as the project is decentralised, and so lacks a centralised authority to take a decision and rewrite the code. In the meantime, the unofficial lead development team are building a layer-2 blockchain called Shibarium. 

This blockchain will house Shiba Inu, and is expected to burn SHIB with a % of every transaction on-chain.

The benefit of burning Shiba Inu is clear. The only thing lacking is a robust mechanism to get there. Expect an updated ShibaSwap burn portal and Shibarium innovations in 2023.