The Shiba Inu team has introduced a burn portal for the Shibarium lawyer-2 solution.
Burning tokens to reduce the supply of a certain token is a common industry practice. Ethereum Improvement Proposal (EIP) 1559 was implemented as part of the London hard fork back in 2021 to burn a portion of transaction fees by introducing a flexible block size as a proxy for network demand. The upgrade introduced the so-called “base fee,” a mandatory fee that is determined by the algorithm based on the level of network usage.
The base fee is always burned, meaning that it gets destroyed by the protocol. This helped to kickstart Ethereum’s deflationary narrative.
The EIP-1559 features were introduced with Shibarium’s Burn hard fork.
Each Shibarium transaction results in a base fee being locked on in the burn contract. As soon as enough BONE tokens accumulate, users will be able to initiate the burn process with the help of the newly launched ShibTorch.
For now, users need at least 100 BONE tokens in order to initiate a burn. After connecting their wallets, users will be able to see the exact amount of SHIB that will be burned as well as the transaction hash.
It is worth noting that only 70% of base fees will be burned. The rest gets collected to the treasury.
BONE tokens get exchanged for SHIB tokens via the Ethereum network. These SHIB tokens end up being removed from circulation.
The introduction of the burn portal is likely to be a bullish catalyst for SHIB since it could potentially significantly reduce the supply of the token.
SHIB is up 0.8% over the past 24 hours, according to CoinGecko data.