This “arbitrage” incentive kept the system working…for a while. If traders saw UST dip below $1.00, they would swoop in to buy it – trade it in for their $1.00 of LUNA – and pocket the difference. In theory, this maintained UST’s “peg” to the actual U.S. Specifically, to buy a UST stablecoin, you’d have to mint one first – which involved burning $1.00 worth of LUNA…and vice-versa. Infamously, Terraform Labs structured its algorithmic stablecoin, TerraUSD ( UST-USD), and native crypto, Terra ( LUNA-USD), with a burn relationship between them. For example, 140 million SHIB were burned over the weekend, and the price popped +15% by Tuesday.Ĭhart: Binance Coin (BNB) July 2021 to July 2022 Those gains could simply be triggered when a bunch of SHIB is burned. Well, Shiba Inu, at least, is building a metaverse, with SHIB powering its in-game economy… However, some of us at InvestorPlace may be willing to concede that “Shiba Inu Has Utility, But Many Investors Simply Don’t Care.”Įven if you do spot a “SHIB ARMY” sticker or two in the wild (as I have, on a MacBook at Panera Bread)… People sound like they’re in it for the laughs – and the gains. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Why, when there appears to be nothing but speculative froth behind them? While DOGE was created as a joke by “hard-forking” (basically: copy/pasting) Litecoin (LTC-USD) in 2013… SHIB was built on Ethereum ( ETH-USD) in 2020, supposedly because its creators “love Shiba Inu Dogs.”īoth puppy-themed “meme coins” just can’t be dislodged from the Top 15 cryptos by market cap. If you’re not that familiar with Shiba Inu… It’s actually a little different from Dogecoin ( DOGE-USD). Source: Shutterstock Token Burns Keep SHIB on the Leaderboard Concept art for the Shiba Inu (SHIB) cryptocurrency.
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