It has been reported that the developers of Shiba Inu have begun to incentivize holders of the SHIB token - who have bought with fiat currencies of some kind - to voluntarily destroy or "burn" portions of those investments to reduce the supply in circulation and theoretically increase. the value of each remaining token.
Burning just 10% of SHIB's tokens will cost hundreds of millions
The idea would be similar to that of people who own Rembrandt paintings agreeing to collectively destroy the works of art to reduce the supply and increase the value of the paintings that continue to exist. Obviously it's not a perfect analogy because a single SHIB token has a quotation of just $ 0,00001222 per token according to CoinMarketCap, but it gives the idea.
Since the official burn portal was launched on April 23, Shiba Inu investors have voluntarily thrown away more than 29 billion SHIB tokens worth more than $ 279.000. Now, that may sound like a lot, but Shiba Inu's current circulation is over 549 trillion according to CoinMarketCap, meaning only 0,000052% of that offering has been burned so far. The price, meanwhile, has been halved since the burn portal launched - which means the price is heading in the wrong direction!
We know that there are broader macroeconomic factors that hurt all cryptocurrencies, such as rising inflation and interest rates, as well as Terra (LUNA) and TerraUSD (UST) contagion, but SHIB's burn action does not did nothing to help the price per token. Shiba Inu supporters will say it needs more time and more token destruction to work. I completely agree, but who will step up and willfully destroy their investment?
Doing some quick math, burning only 10% of the circulating supply of SHIB tokens - which would mean 54 trillion tokens would have to be destroyed - at the current price of $ 0,00001222 per token would cost investors $ 659,8 million in total. total. This is real money that many investors should be willing to lose, and there would still be more than 500 trillion SHIBs in circulation.
A new "reward" token is a bewildering solution
To try to incentivize Shiba Inu users to burn more SHIBs, the developers are offering 1: 1 "reward" tokens, called Ryoshis Vision (RYOSHI), which are staked on the decentralized exchange ShibaSwap. The RYOSHI promise an annual passive return of 9,6%. While it seems like a fair trade - getting paid in RYOSHI to destroy SHIB - it may not be.
At the time of this writing, a RYOSHI is priced at $ 0,0000000418 per token, so a RYOSHI is significantly lower in value than a SHIB token, valued at $ 0,00001222. Additionally, the RYOSHI have a maximum supply of over 900 trillion tokens. In conclusion, the Burn Portal rewards calculation looks more like sleight of hand than a sustainable valuation model.