The Ethereum founder’s donations upset many SHIB holders as the price of the tokens fell by almost 50%. He said that he burned the coins for security reasons and to avoid being associated with speculative transactions.
People know that they have power when they can burn millions of cryptocurrency tokens and change the course of its price dramatically. In recent days, Vitalik Buterin burned thousands of Shiba Inu tokens, equivalent to more than USD 6.7 billion. However, many might find the reasons why he did so justifiable.
Many people may not quite understand the implications of token burning. They must know that this act consists of transferring a certain number of tokens to an unusable account. In this way, they will be out of circulation, the supply will decrease, and the scarcity will increase.
The Reasons for Vitalik’s Massive Burning of Shiba Inu
Vitalik Buterin burned exactly 410.24 billion Shiba Inu tokens, which represents 90% of what remained in his wallet. The Ethereum co-founder had recently donated 50 trillion SHIB to India’s COVID Relief Fund.
Despite the kindness of this act, many SHIB holders expressed their anger. After the massive donation, the price of the tokens plummeted, falling by almost 50%. However, Buterin also donated large amounts of other meme cryptocurrencies, such as Dogelon and Akita, in addition to SHIB tokens.
The developer received the Shiba Inu that he donated and burned from the creators of the token themselves. He argued that if he did anything else with the USD 6.7 billion, it could lead to unnecessary speculation.
Buterin said that the way communities have reacted to his donations has impressed him. He requested cryptocurrency creators not to send him any coins without his prior consent.
The Exact Words that the Entrepreneur Said
“I have decided to burn 90% of the Shiba tokens that remain in my wallet. I will send the other 10% to a charity (not yet defined) with similar values to CryptoRelief but with a more long-term orientation.” In the hash of the transaction, Buterin wrote that CryptoRelief is a project that seeks to prevent loss of life on a large scale.
Also, the Ethereum founder said that having the coins was not the main priority for him. First, he stressed that he was getting rid of them for security reasons. Then, he added that he would prefer to avoid being associated with any transaction that would lead to unnecessary speculation.
The Impact that the Burning of SHIB Had on Its Price
This event is relevant as the amount that Vitalik burned also represents more than 40% of all SHIB in circulation. However, contrary to what has happened with the donation, the burning has served to drive the price of the token higher.
The news about the burning of SHIB has caused the price of SHIB to rise by almost 2%. At the time of writing this article, the token is trading at USD 0.00000977, according to CoinGecko.
By Alexander Salazar
