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Here’s How Shibarium Could Affect Shiba Inu Price

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Shiba Inu
Shiba Inu

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The Shibarium mainnet launch is the SHIB ecosystem’s most anticipated project, touted to boost Shiba Inu’s price. The expectations for the layer-2 scaling solution have increased as the launch date draws near.

Most SHIB investors speculate about the project’s impact on Shiba Inu price, whether positive or negative. Let’s see how?

Shibarium Objectives As Outlined By Developers

Contrary to popular misconception, Shibarium developers’ primary aim in developing the project is not to increase SHIB’s price. 

Instead, Shibarium is a layer-2 scaling solution aimed to enhance the Shiba Inu ecosystem by improving fundamental areas such as reducing network fees, increasing transaction speed and privacy, and introducing utility.

However, these improvements could increase investor interest in Shiba Inu, driving its demand and causing a potential price increase. In addition, Shibarium developers said it would cut Shiba Inu’s extensive supply by inducing token burns. 

The Layer-2 network operates a burn mechanism that automatically converts accumulated BONE tokens (Shibarium’s gas token) to SHIB, sending them to the dead wallets.

Shibarium seeks to utilize 70% of gas fees (BONE) in transactions to burn SHIB tokens. By so doing, the scaling solution will facilitate the elimination of excess SHIB tokens, reducing the meme coin supply and potentially increasing demand.

Notably, increased coin demand due to scarcity can propel prices. A 2022 Finder survey collected data on 55 Fintech industry leaders to garner insights on Shibarium’s potential impact on SHIB price.

About 50% of the respondents expressed uncertainty, while 25% were confident that Shibarium would positively impact SHIB’s price. And 22% of the experts said it would not affect the price, while only 3% said it would have a negative impact.

Factors That Would Determine Shibarium’s Effect on SHIB’s Price

It is worth noting that Shibarium’s impact on SHIB depends, to a large extent, on its adoption rate. 

While the main objective is to enhance the SHIB ecosystem to attract more utility, its long-term effect on the meme coin’s price depends on its mass adoption.

The number of investors and developers building on the network determines the weight of impact Shibarium will have on Shiba Inu’s price movement. 

Increased adoption would yield more transactions and push network activity, improving utility. That would potentially propel Shiba Inu’s price higher.

Meanwhile, Shibarium’s future largely depends on the success of the beta testnet, Puppynet. The number of people who adopt the testnet hints at the reception that awaits the Mainnet.

But recent reports noted that Puppynet is doing well with an impressive adoption rate. Data shows that Puppynet has processed over 20 million transactions since May 15. 

At press time, Puppyscan data shows that Puppynet has processed more than 21 million transactions, with over 16 million wallets and ~1.3 million blocks. Therefore, the testnet’s adoption rate is a glimpse of the crypto community’s interest in Shibarium.

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