First 97M Shiba Inu Burned on Shibarium But Burns Outside SHIB L1 Won’t Affect Shib Supply: Details

Shiba Inu burns are starting to get complicated, as Shibburn, the community-driven burn tracker, confirmed that burns outside L1 will not affect SHIB’s supply amid the first burn on Shibarium.

Shib CoOp, a community-based Metaverse real estate project, celebrated a milestone on Shibarium by conducting the layer-2 network’s first SHIB burn, totaling 97 million tokens. Taking to X, the team behind the project asked when Shibburn could start tracking burns such as this.

Another first on #Shibarium. @ShibCoOp 1st to Burn $SHIB on Shibarium. 97 Million 🔥🔥🔥
Wondering when @Shibburn will be able to track these burn transactions? pic.twitter.com/5za15ZtFkY

— Shib CoOp – Land Community & Builders (@ShibCoOp) October 18, 2023

Data from Shibariumscan, Shibarium’s dedicated blockchain explorer, validates the transaction, with 97 million Shiba Inu tokens now resting in the burn wallet. As revealed by Shibariumscan, the burn occurred yesterday at precisely 12:32 (UTC).

However, Shibburn responded to SHIB CoOp’s query, emphasizing the unique nature of this burn. They clarified that they would not be tracking these particular transactions.

Hi. We won’t be tracking those transactions since they don’t directly burn $SHIB on Ethereum. The burn addresses on L2 will function for tokens generated on a L2 layer, but to burn $SHIB on the L1, it must be done on the Ethereum network since this is where the original contract…

— Shibburn (@shibburn) October 18, 2023

This is due to the difference between layer-1 (L1) and layer-2 (L2) networks. In this case, Ethereum is the layer-1 network, while Shibarium is the layer-2 blockchain built atop Ethereum.

The burn addresses on a layer-2 network serve tokens generated within that network. As a result, Shibburn explained that for SHIB tokens to be incinerated on the L1, the process must take place on the Ethereum network.

The Ethereum network is the birthplace of the original contract for Shiba Inu. According to the Shibburn team, this distinction between L1s and L2s also explains why they do not monitor burns involving pegged SHIB tokens on the Binance Smart Chain (BSC).

Shibburn explicitly emphasized: “We can’t say those tokens were actually removed/burnt from the total supply in L1.”

L2 Burns Do Not Affect Shiba Inu Supply

A curious community member sought further clarification, asking Shibburn to affirm the legitimacy of the burn. In response, Shibburn emphasized that if a transaction fails to burn SHIB on the L1 (Ethereum), it has no bearing on the actual supply of Shiba Inu tokens.

“If it doesn’t burn $SHIB on Layer 1, it won’t affect the actual supply. It should be done the same way the Shibarium team intends to burn $SHIB, on Layer 1,”the team disclosed in a post.

Shibburn emphasized that, for Shibarium burns to be effective, they must adhere to the Shibarium development team’s method. Notably, the team has stated that once the network accumulates up to $25,000 worth of BONE in fees, the BONE will be converted to SHIB and burned on Ethereum.

A possible explanation for this situation is that when a user bridges tokens from an L1 to an L2, the L1 tokens reside within a contract while the L2 network mints the corresponding L2 tokens.

However, if the user then transfers these L2 tokens to a burn wallet, the matching L1 tokens remain confined within the bridge contract wallet, and the circulating supply of the L1 token is unaffected. What makes its way to the burn wallet is the batch of L2 tokens.

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