The allure of a single Shiba Inu or Terra Luna Classic token reaching a value of one US cent is a dream many cryptocurrency enthusiasts hold dear. However, a recent analysis by a computer engineer casts a shadow of doubt on this aspiration, highlighting the slow burn rates plaguing both SHIB and LUNC.
Burning for Value:
Crypto burning refers to the process of permanently removing tokens from circulation by sending them to an inaccessible wallet address. This reduces the overall supply, theoretically increasing the value of remaining tokens due to scarcity. Both SHIB and LUNC have embraced this strategy, with varying degrees of success.
Shiba Inu’s Struggles:
Despite the Shiba Inu community’s (SHIB Army) efforts, including a significant burn of 76.4 billion SHIB in 2023 and the upcoming Shibarium L2’s auto-burn mechanism, the massive initial supply of 589 trillion SHIB remains a formidable obstacle. This number dwarfs the initial supply of LUNC, highlighting the sheer volume of tokens SHIB needs to burn to achieve a significant price increase.
LUNC’s Edge, But Not a Guarantee:
While LUNC boasts a more manageable current supply of 5.44 trillion, thanks to the destruction of over 1 trillion tokens through community efforts and Binance’s monthly burn program, their journey is far from over. Even with this impressive burn rate, LUNC’s price has only seen a modest 3.8% increase in the past year.
The Unanswered Question:
The effectiveness of SHIB’s upcoming auto-burn mechanism remains an open question. Whether it will burn enough tokens to truly impact the price is dependent on Shibarium L2’s user base and activity level.
Beyond Burning:
The engineer’s analysis underscores the limitations of burning as a sole strategy for price appreciation. Both SHIB and LUNC communities need to explore additional avenues for growth, such as utility development, increased adoption within the crypto ecosystem, and fostering real-world use cases for their tokens.
A Cautionary Tale:
Terra Luna Classic’s tokenomics model, with its theoretical infinite maximum supply according to CoinGecko, further complicates the picture for LUNC holders. This model inherently contradicts the scarcity principle that burning aims to achieve.
Conclusion:
The road to a penny for SHIB and LUNC appears long and arduous. While burning can be a valuable tool, it requires a significant and sustained effort alongside other development initiatives to truly impact token value. The success of each token will ultimately depend on the ability of their respective communities to adapt and evolve in a competitive cryptocurrency landscape.
