Shiba Inu's recent hard fork, which introduced the new Bor version of Shibarium on August 9, aims to enhance the ecosystem's deflationary characteristics and improve overall functionality. This upgrade is particularly significant as it introduces a burn mechanism linked to transaction fees, which is expected to impact the price of SHIB tokens.
The Shiba Inu team announced the launch of the hard fork via their official X handle. The core feature of this upgrade is the implementation of a burn mechanism that will automatically convert 70% of all base transaction fees collected on the network into SHIB tokens. These tokens will then be permanently removed from circulation through a burning process. The remaining 30% of the fees will be allocated towards platform maintenance, development, and initiatives aimed at growing the ecosystem. This strategy is designed to progressively reduce the overall supply of SHIB, which could lead to an increase in the token's value over time. The immediate effects of this upgrade have been notable; data from SHIBBURN indicates that the token's burn rate surged by over 4430% within just 24 hours following the hard fork.
Following the hard fork, Shibarium's statistics reflect a robust engagement within the ecosystem. As reported by Shibariumscan.io, the Layer 2 solution has recorded a staggering 418 million total transactions and boasts over 1.8 million wallets. These figures underscore the growing adoption and utilization of the Shiba Inu ecosystem.
Despite the successful implementation of the hard fork, Shiba Inu's price has not reflected the anticipated bullish sentiment. Over the past week, SHIB's price has dropped by more than 5%, trading at approximately $0.00001407 at the time of writing. The market capitalization stands at over $8.2 billion, securing its position as the 13th largest cryptocurrency. An analysis of data from Glassnode reveals a significant decline in SHIB's NVT (Network Value to Transactions) ratio over the past two weeks. A lower NVT ratio typically indicates that an asset is undervalued, suggesting a potential price increase in the near future. Additionally, the supply of SHIB on exchanges has decreased, indicating rising buying pressure on the memecoin.
Further insights into SHIB's market performance can be gleaned from its transaction velocity, which has spiked recently, indicating increased usage in transactions. However, a drop in network growth serves as a bearish signal, suggesting that while transactions may be increasing, new users are not joining at the same rate. Examining SHIB's daily chart reveals mixed signals from market indicators. The Chaikin Money Flow (CMF) has shown a sharp uptick, which is a positive sign for potential price movement. Moreover, SHIB's price has recently touched the lower limit of the Bollinger Bands, a technical indicator that often precedes price increases. Conversely, the Relative Strength Index (RSI) remains bearish at a value of 36, indicating that the asset may still be in a downward trend.
In summary, Shiba Inu's recent hard fork is a strategic move aimed at enhancing the ecosystem's deflationary nature and potentially boosting the value of SHIB tokens. While the immediate effects of the upgrade have been positive in terms of transaction activity and burn rates, the overall market response has been subdued. As the ecosystem continues to develop and adapt, the long-term impact on SHIB's price remains to be seen, with current indicators suggesting both opportunities and challenges ahead.
