You know that you have power when you have the possibility to burn millions of tokens of a cryptocurrency and change the course of its price drastically. This is what Vitalik Biterin has done by burning thousands of Shiba Inu tokens, worth more than US $ 6.7 billion. However, the reason may seem justified.
For those who do not understand very well what this implies, we will explain what a token burning is. Burning is the act of transferring tokens to an unusable account, thus withdrawing them from circulation, decreasing supply and increasing scarcity.
Why did this massive burning of Shiba Inu by Vitalik Buterin take place?
Ethereum co-founder Vitalik Buterin burned exactly 410.24 billion Shiba Inu tokens. This represents 90% of what was left in Buterin’s portfolio following his 50 billion SHIB donation to the Covid India Relief Fund last week.
Although kind, the act provoked the anger of many SHIB holders. The token’s price plummeted shortly after the massive donation, dropping nearly 50%. However, your token donation was not only with SHIB. He also donated generous amounts in other meme coins, such as Dogelon and Akita, to other fundraising activities.
This amount that he donated and burned was given to him by the creators of the token, arguing that if he did something else with the $ 6.7 billion, it could cause unnecessary speculation.
Although Buterin said he was impressed by the way communities have treated his donations, he urged coin creators not to send him any coins without his prior consent.
What exactly did the businessman say?
“I have decided to burn 90% of the remaining Shiba tokens in my portfolio. The remaining 10% will be sent to a charity (not yet decided) with similar values to cryptorelief but with a more long-term orientation. Based on what Buterin wrote in the transaction hash. Cryptorelief is a project that seeks to prevent loss of life on a large scale.
Additionally, Buterin argued that having the coins was not an option anyway. The first thing he stressed is that it would be for security reasons. Then he added that any transaction associated with him would lead to unnecessary speculation, something he would rather avoid.
Impact of burning SHIB on its price
The important thing about this event is that the amount burned also represents more than 40% of all SHIB in circulation. But unlike the donation, the burn has acted as a somewhat bullish catalyst for the token.
SHIB’s price is up nearly 2% on the news. The token is currently trading at $ 0.00001598 as of press time, according to CoinGecko.