What is the Token Economics Model of Shiba Inu (SHIB) and How Does it Work?

SHIB's deflationary model aims to reduce circulating supply over time

Shiba Inu implements a multi-faceted deflationary strategy designed to systematically reduce its massive 589.5 trillion token supply. The protocol combines manual burns with automated mechanisms through Shibarium, its Layer-2 blockchain, creating continuous downward pressure on circulating supply.

The burn mechanism operates through several channels. Community members participate actively in token destruction, while transaction fees on Shibarium trigger automated burns. In late 2025, SHIB achieved record-breaking results, destroying 17 million tokens within 24 hours and 621.6 million in a single transaction, demonstrating the strategy's accelerating momentum.

Despite these impressive figures, the sheer magnitude of SHIB's initial supply means each burn represents only a fraction of total tokens. Analysts project the token could reach $0.00009014 by year-end, though sustained burn activity remains essential. The deflationary model succeeds primarily when coupled with genuine ecosystem adoption and expanding real-world utility through decentralized finance applications and token-based payment systems.

42% of SHIB tokens burned to date to create scarcity

As of 2025, Shiba Inu has achieved a significant milestone with 42% of its total token supply permanently removed from circulation through burning mechanisms. This substantial reduction represents a deliberate strategy to enhance scarcity and potentially increase token value over time.

The burn rate has demonstrated remarkable volatility, with recent spikes reaching extraordinary levels. In one instance, the burn rate surged by 201,000% within a 24-hour period, removing 116 million tokens and reducing circulating supply to 589.24 trillion tokens. Another notable event saw the burn rate increase by 112,000%, permanently eliminating 116 million SHIB tokens from the ecosystem.

The Shiba Inu community has actively participated in these burn initiatives through organized campaigns dedicated to transaction fee burning mechanisms. This community-led approach, combined with the development of Shibarium, the project's Layer-2 blockchain solution, has created a sustainable framework for ongoing token reduction.

The scarcity created through these burning activities has generated bullish market perception, as reduced token supply theoretically creates upward pressure on price movements. This deflationary mechanism represents a core component of Shiba Inu's long-term economic model and sustainability strategy.

Community governance through BONE token voting rights

BONE token serves as the primary governance mechanism within the Shiba Inu ecosystem, enabling token holders to participate in critical decision-making processes that shape ShibaSwap's future. As the native governance token, BONE grants voting rights proportional to holder balances, creating a token-weighted voting system where community members directly influence protocol development and ecosystem proposals.

The voting structure operates through tiered participation levels, with holders receiving enhanced voting power bonuses based on engagement metrics. Level 3 participants, for instance, receive a 25% voting power bonus alongside proposal submission rights, incentivizing deeper community involvement. This multi-tiered approach ensures that active stakeholders maintain greater influence over governance decisions while maintaining democratic principles across the broader community.

BONE's integration into the SHIB DAO establishes a decentralized governance framework where holders can participate in voting without intermediaries. The voting mechanism emphasizes informed decision-making by encouraging comprehensive proposal review before casting votes. With approximately 1.5 million unique token holders across the ecosystem, BONE's governance function distributes decision-making authority across a substantial community base. This distributed governance model transforms BONE from a simple utility token into a cornerstone mechanism for community-driven development within the Shiba Inu ecosystem.

FAQ

Is shib coin worth anything?

Yes, SHIB coin has value. By 2025, it's expected to show significant growth, potentially reaching $0.001. Its large community and ongoing developments contribute to its worth.

Will SHIB ever hit $1?

SHIB is unlikely to reach $1 due to its massive supply. Even with ongoing token burns, the circulating amount remains too high for such a price point.

How high will Shiba Inu go in 2025?

Shiba Inu is expected to reach $0.00001029 by the end of 2025, based on current market trends and predictions.

Will Shiba hit $1 in 2040?

It's highly unlikely. Shiba Inu would need a market cap of $589 trillion to reach $1, which is currently unattainable given its trajectory and market conditions.