Shibarium, the Layer 2 network from the Shiba Inu team, has seen its performance come under the spotlight, given the recent change in fortune. Considering how integral the network’s success is to Shiba Inu’s (SHIB) growth, this development has undoubtedly been a cause for concern among members of the SHIB community.
Shibarium’s Daily Transactions Declines By Over 90%
Data from Shibariumscan shows that the daily transactions on Shibarium have declined by over 90% since hitting a recent high of 121,000 transactions recorded on April 19. On May 19, the layer-2 network recorded a daily transaction of just over 11,000. This has been the trend for a while now, with May 3 being the only time the layer-2 network recorded a daily transaction above 20,000 this month.
Shibarium’s decline is worrisome, especially considering the immense success the layer-2 network recorded at the end of last year. In December 2023, Shibarium averaged over 7 million transactions for most of the month. However, things began to go downhill from the beginning of the year when Shibarium’s daily transactions crashed by almost 50%.
Meanwhile, Shibarium’s underperformance cannot be ignored, given its role in Shiba Inu’s growth. Since the layer-2 network launched, the Shibarium team has committed to using some transaction fees earned to carry out SHIB burns. Thanks to this, over 33.8 billion SHIB tokens were burned in December when Shibarium achieved its peak success.
However, the decline in the number of daily transactions on the Shibarium network has reduced the amount of transaction fees earned, ultimately affecting the number of SHIB burns carried out by the network. This has caused SHIB’s burn rate to drop significantly as of late, with tokens burnt weekly nowhere close to the amount burned when Shibarium was on a high.
Shiba Inu Has Continued To Shine Regardless
Despite Shibarium’s underperformance since the start of the year, Shiba Inu has still made significant price gains. The meme coin currently boasts a year-to-date (YTD) gain of over 131% and is among the best-performing crypto assets this year. Shiba Inu’s impressive performance this year has been mainly thanks to its fundamentals, with the Shiba Inu team actively working on ways to improve the ecosystem.
Shiba Inu has also been a huge beneficiary of the meme coin narrative, with this category of crypto tokens projected to be one of the leading narratives in this bull run. Meanwhile, from a technical analysis perspective, crypto analysts have also offered a bullish outlook for Shiba Inu, predicting that the meme coin will hit a new all-time high in this market cycle.
Therefore, Shiba Inu is still expected to enjoy further price surges as this bull run progresses. However, there is no doubt that an increase in Shibarium’s daily transactions could provide more bullish momentum for the second-largest meme coin by market cap.
Featured image created using Dall.E, chart from Tradingview.com
