Vitalik Buterin burns 90% of his Shiba Inu (SHIB) tokens

Thu 20 May 2021 ▪ 9h27 ▪ 3 min read — by William Proctor

The developers behind Shiba Inu will be bitterly regretting their choice to have given Ethereum inventor Vitalik Buterin control of half of SHIB’s total supply. The Russian-Canadian developer caused the price of this meme coin to crash by dumping much of it onto the market and donating the proceeds to charity. After sparking strong protests from SHIB holders, Buterin raised the stakes even further: he simply burned $6 billion worth of the SHIB sent to him (~£4.20 billion, how ironic).

A marketing stunt that turned into a scandal

When it transferred half of SHIB’s total supply to Vitalik Buterin, the Shiba Inu team probably did not envisage such a disastrous series of events. Last Sunday, Buterin removed them from circulation forever, commenting in a note attached to the transaction:

“I’ve decided to burn 90% of the remaining shiba tokens in my wallet. The remaining 10% will be sent to a (not yet decided) charity with similar values to cryptorelief (preventing large-scale loss of life) but with a more long-term orientation.”

Vitalik explained that he had no desire to wield such power and that he would have preferred for the founders of the project to have transferred the tokens to charities in the first place. This is something he actually did by donating $1.2 billion (£850 million) in SHIB to a fund helping victims of COVID in India last week. By moving his SHIB, he caused a crash in the price, and attracted the wrath of the meme coin community. Yet, these comments did not dissuade him, and the marketing stunt that the founders of Shiba Inu thought they could pull off has backfired horribly.

The dog can’t fetch, the stick’s been burned

Shiba Inu, the closest competitor to Dogecoin (DOGE), saw a nearly 900% price increase since the end of April, with an ATH of $0.00003791 on 10th May. This led to asset listings on the top exchanges Binance and Huobi. However, Buterin slammed the brakes on this upwards trend, as noted above.

Still, the astute among you will have noticed that all of this would actually benefit SHIB’s tokenomics, since the disappearance of up to 45% of its supply makes it scarcer. CoinGecko reported a small increase in the price of SHIB to $0.00001880 a few hours after Buterin’s actions. However, the price has quickly declined to $0.00001600 at the time of writing.

So, a double burn for Shiba Inu, who will have to find another strategy to boost both its value and credibility. This is a challenge for all the meme coins in the space, as those who understand crypto are reluctant to get behind these kinds of projects. 

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William Proctor

Hi, Привет & Salut! I’m interested in two things: crypto and languages. So I’m really excited to be part of the multinational CoinTribune team, where I can share my crypto knowledge with people from around the world, one article at a time.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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