Shibarium, an Ethereum layer 2 solution, can be termed one of the most-hyped crypto projects of 2023, expected to introduce a higher network speed and lower transaction costs to the Shiba Inu ecosystem.
After months of beta testing, Shiba Inu developers finally announced on August 16 that the Shibariun mainnet is now live. However, contrary to popular predictions, SHIB, Shiba Inu’s most prominent token, appears to have taken a nosedive upon this development.
SHIB Maintains Bearish Form As Shibarium’s Ethereum Bridge Develops Fault
So far, Shibarium’s launch has yielded a negative effect on SHIB, with the token losing 6.86% of its value in the last 24 hours based on data from CoinMarketCap. Prior to SHIB’s dip today, the token had shown an overall negative performance this week, falling from $0.00001059 on Monday to $0.000009527 on Wednesday.
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For now, SHIB’s loss post-Shibarium launch can be attributed to a technical issue with the much-anticipated project. According to a post by Whalechart on X, more than $1.7 million worth of ETH is presently stuck in the Shibarium bridge. This development has caused much panic among investors.
In addition, it seems these assets may be unretrievable following a message being circulated on social media that appears to be from Shiba Inu developer Shytoshi Kusama.
Meanwhile, it is worth stating SHIB is not the only Shiba Inu token under significant selling pressure, with the BONE and LEASH also declining by 15.48% and 22.59%, respectively, over the last day.
$1.7M+ worth of $ETH transferred to Shib’s Layer 2 bridge, known as ‘Shibarium,’ is reportedly irretrievable. pic.twitter.com/lLDXsNvAx9
— Ahmad (@Ahmadrobert_) August 17, 2023
Could Shibarium Be A Set Back To The Shiba Inu Ecosystem?
Shibarium was designed to enable the various projects of the Shiba Inu ecosystem, such as the Shib Metaverse, Shibaswap DEX, and the Shiboshi NFT Project, to operate at an increased speed while offering users lesser transaction costs.
Furthermore, all Shibarium transactions are to lead to SHIB burn, thus serving as a deflationary mechanism of the token. Due to these proposed features of the Shibarium project, it was widely expected that the layer 2 solution could bring about a higher adoption of SHIB and other Shiba Inu native tokens which in turn could boost market prices.
There were many positive signs backing this prediction, with the SHIB token notching significant gains upon any news on the progress of Shibarium in the last few months.
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In fact, Shibarium launched on Wednesday with 21 million wallets created, demonstrating a high level of user interest. However, the recent issue with the Ethereum bridge provides much concern for Shiba Inu investors on if the Shibarium project can live up to its potential.
Nevertheless, it may still be considered too early to call the project a failure, especially as there is no official statement from the Shiba Inu team addressing this challenge.
At the time of writing, SHIB is trading at $0.000009295, with a 0.37% gain in the last hour. Meanwhile, the token’s daily trading volume is down by 0.42%, sitting at $431.32 million.