Shiba Inu’s Burn Rate Skyrockets

So far this year gold has outperformed the flagship cryptocurrency Bitcoin ($BTC) and the stock market’s benchmark index, the S&P 500. While the precious metal is up 2.9% year-to-date, the S&P 500 has lost 17% of its value. BTC is down 36%.

Over the past week, the trend appears to have started turning around. Bitcoin has moved up around 5.86% as it recovered from the collapse of the Terra ecosystem, while gold moved up 2.1% after a dip. The S&P 500 managed to recoup some losses by moving up 2.3%.

The cryptocurrency market’s recovery from the collapse of Terra has seen the total market capitalization of the space move up by around $70 billion to $1.29 trillion.

The meme-inspired cryptocurrency Shiba Inu ($SHIB) was a top performer as the SHIBArmy picked up the pace when it comes to burning tokens. A new daily record of 12.8 billion tokens being burned was set this week after the ShibaSwap burn portal started distributing $RYOSHI to those burning at the platform.

The team behind the meme-inspired cryptocurrency launched the burn portal on April 23 and from that point on until rewards started being distributed on May 18 the SHIBArmy burned around 29.5 billion $SHIB. After rewards started being distributed earlier this week, the figure jumped to well over 50 billion tokens at the time of writing.

So far, a total of 410.36 trillion SHIB have been burned since the cryptocurrency was launched. Most of those were burned by Ethereum co-founder Vitalik Buterin, who removed 410 trillion SHIB from circulation in a single transaction.

Shiba Inu’s creator initially sent Buterin 50% of the cryptocurrency’s supply. While most tokens were burned, a large portion of them were donated to support India COVID relief efforts.

Throughout the week, a new collaboration between a major global restaurant software and payments solution provider and a fintech payments firm started allowing thousands of restaurants in 65 countries to accept cryptos as a payment method.

These cryptocurrencies include meme-inspired assets like SHIB and DOGE, as well as several stablecoins and blue-chip cryptocurrencies like Bitcoin and Ethereum. The partnership is set to “seamlessly integrate” the software of both firms to allow for advanced payment methods at thousands of restaurants.

Data from Cardano blockchain insights shared on Google’s Data Studio has shown that the number of wallets holding ADA on the Cardano blockchain grew by over 70,000 over the last 30 days, with well over 2,000 wallets being added per day.

Notably, data has also shown retail wallets had increased their ADA holdings ahead of Terra’s collapse earlier this month, by more than 186% to collectively hold over 36% of the cryptocurrency’s supply.

More recent data has shown that ADA whale transactions have shot up to a 4-month high after the price of the cryptocurrency plunged to a bottom at $0.40 earlier this year. Whales were seemingly buying the dip ahead of an upcoming hard fork that will improve the network’s performance.

Charles Hoskinson, the co-founder and CEO of IO Global, the company behind Cardano’s research and development, has quelled concerns over a crypto market recession, saying large corrections are routine for the industry.

In a video, Hoskinson told viewers that long-time crypto investors were relatively unfazed by the recent price correction. Hoskinson noted that the industry had been through similar severe price corrections in the past, insinuating that market volatility was par for the course. 

Billionaire Bill Ackman has weighed in on the collapse of the Terra ecosystem. In a series of tweets, Ackman said his investigation into the algorithm of Terra revealed what he likened to a “crypto version of a pyramid scheme.” He noted that investors were promised near 20% returns backed by a token that generated value from increasing demand via new investors. 

Ackman said Terra’s primary draw was to attract more followers and limit the supply of its token via a vesting schedule. He argued that the price collapse occurred when the sellers of Terra overwhelmed buyers. 

 He argued that Terra was enabled by the “hype about crypto,” and that “schemes like Luna threaten the entire crypto ecosystem.” Ackman warned that the crypto industry should work to self-regulate, including doing away with digital asset projects that have no underlying business models.

The collapse of the Terra ecosystem occured after a $500 million withdrawal from the Anchor Protocol, a platform offering 19.5% a year on UST deposits, saw the algorithmic stablecoin briefly lose its peg after the funds were sold on Curve, where liqudity was low.

The loss of the peg triggerd a bank run that saw LUNA’s inflation explode. The ecosystem’s collapse has been branded one of the largest wealth destruction events in cryptocurrency history.

Cryptocurrency investor sentiment appears to have dropped sharply as its Fear & Greed index, which serves as an aggregate for investor confidence and attitude towards the market, dropped from 24 earlier this month to 10, showing a state of “extreme fear.”

The index, it’s worth noting, is based on emotional behavior in the market. When fear sets in, some investors may see a buying opportunity, while greed may be a sign the market is due for a correction.

Total value locked in the decentralized finance (DeFi) space has meanwhile risen slightly after Terra’s collpase when measured in U.S. dollars from around $111 billion to around $114 billion, according to data from DeFiLlama. MakerDAO, the entity behind the DAI stablecoin, makes up 8.66% of the TVL with over $9 billion on its protocol.

 

A sharp ddrop in total value locked in the DeFi space was seen earlier this month amid the collapse of the Terra ecosystem, which sw LUNA and UST both become nearly worthless.