Shiba Inu [SHIB] Faces Crossroads as Gas Fees on Layer-2 Network Shibarium Soar by 2,024%

BONE on Shibarium might pose a threat

Shiba Inu [SHIB] has unveiled the arrival of Shibarium, a layer 2 network that aims to enhance the SHIB token's capabilities. This development has sparked a surge in gas fees on the network, presenting a critical juncture for SHIB's future.

The recent statistics from ShibariumScan highlight a rise in transaction volume, surging by 70% from 4,537 to 7,715. Moreover, the number of active accounts has also witnessed a substantial increase of 157.14%, climbing from 42 to 108.

As the native token of the Shiba Inu ecosystem, BONE plays a crucial role in facilitating transactions on the Shibarium network. In essence, utilizing Shibarium for transactions entails using BONE.

According to ShibariumScan, BONE has experienced a rise of approximately 3% in the last 24 hours, valued at $0.425079 at press time. This uptick poses a potential challenge for SHIB's deflationary model, which aims to keep the supply in check.

To provide context, SHIB developers routinely implement a burning procedure, where tokens are sent to inaccessible wallets, as a strategy to manipulate value.

On Shibarium, a portion of BONE tokens are converted into SHIB and sent to dead wallets. However, with transaction fees spiking by 2,024%, this could deter stakeholders, potentially impacting SHIB's value indirectly.

At the time of writing, SHIB has managed to secure a place among the top gainers, locking in consecutive green candles on the daily price chart. The token has surged over 5% in the past seven days. Much of this momentum can be attributed to Bitcoin's bullish moves over the last four days.

Despite this positive news, the burning procedure has hit a snag, with only 240,000 SHIB tokens burned—a staggering 85% decline from the earlier 1.7 million. This development may raise concerns among stakeholders.

This thesis could be further validated if transactions on Shibarium slow down, leading to fewer SHIB burns. Conversely, if network activity maintains its appeal despite high gas fees, the SHIB community might have less to worry about.

However, while the network boasts new highs, registering 416.785 million total transactions, the recent transaction volume has certainly hit rock bottom—dropping from 30K in mid-August to 11K at press time.

Put simply, new investors might be deterred from accessing Shibarium as transactions become costly. According to AMBCrypto, if this trend holds for an extended period, it could harm SHIB's value in the long run.

This development poses a critical juncture for SHIB, as the token's future trajectory hinges on the efficient implementation of its deflationary model. If gas fees remain prohibitively high, they could hinder SHIB's ability to achieve its value targets.

Moreover, a slowdown in transactions could also adversely impact SHIB's value. However, if network activity remains robust despite the high gas fees, the SHIB community may be able to breathe a collective sigh of relief.

Currently, SHIB's appeal is closely tied to Bitcoin [BTC] maintaining the $64K ceiling. A retracement could follow if SHIB burns slow down.

In short, while the Shibarium network celebrates its milestone, high gas fees could adversely affect SHIB's long-term outlook if its deflationary model isn't implemented promptly.

The above is the detailed content of Shiba Inu [SHIB] Faces Crossroads as Gas Fees on Layer-2 Network Shibarium Soar by 2,024%. For more information, please follow other related articles on the PHP Chinese website!