Shiba Inu (SHIB -1.09%) captivated investors last year, soaring over 42,000,000%. The meme token has since fallen 73% from its high, but many investors are more bullish than ever, thanks to efforts like Shibarium, the Shiba Inu metaverse, and burn projects. In fact, some enthusiasts think Shiba Inu could reach $0.15 by 2030, up from today's price of $0.00002391. That implies 412,000% upside over the next eight years.
Is that possible? Let's take a closer look.
Shiba Inu is an ERC-20 token built on Ethereum, meaning it lacks its own blockchain. For that reason, other projects in the Shiba Inu ecosystem -- like the decentralized exchange ShibaSwap -- are also built on Ethereum. As a result, ShibaSwap users must pay the outrageous transaction fees now charged by the Ethereum network. Fortunately, that's about to change.
Shibarium is a layer-2 scaling solution that will move transactions to a new platform, thereby boosting throughput and reducing fees. A beta version of Shibarium is set to launch in the next few months. Better yet, Shibarium will feature a burn mechanism that aims to reduce the circulating supply of Shiba Inu.
The Shiba Inu metaverse
Earlier this year, the developer community announced the Shiba Inu metaverse. The project will be powered by Shibarium, and it will allow Shiba Inu enthusiasts to purchase virtual plots of land in a digital world. At first, 36,431 plots will be auctioned off across four districts, but the metaverse map will eventually expand to 100,595 plots.
According to the developer community, landowners will be able to generate passive income, gather in-game resources, and generate rewards. Users will also be able to build and manage their own projects in the metaverse. That new utility could drive adoption of Shiba Inu, pushing its price higher. And once again, the Shiba Inu metaverse features an integrated burn mechanism.
Burn projects have become a focal point of the Shiba Inu community. The idea is simple: If you destroy a percentage of circulating tokens, the remaining tokens are more scarce and, therefore, more valuable. However, there are still two big flaws with burn-based investment theses.
First, a tremendous number of tokens would need to be burned for Shiba Inu to hit the $0.15 price target. Even if Shibarium and the Shiba Inu metaverse are so popular that they drive the token price up 100-fold -- meaning Shiba Inu's market cap would climb from $13.3 billion to $1.3 trillion -- more than 540 trillion tokens (98.4% of the circulating supply) would need to be burned.
Second, if everyone burns the same number of tokens, no one actually makes or loses any money. Each person would still own the same percentage of the total supply. To profit, you would have to destroy fewer tokens than the average person. Put another way, if your investment thesis is based on burn-fueled price appreciation, you are effectively hoping that other people are willing to throw money away.
Burn projects could certainly boost the price to some degree, but eventually, people will stop engaging with token-destroying products.
A remote possibility
So, could Shiba Inu hit its $0.15 price target by 2030? Yes, it's certainly possible. But even if Shibarium and the Shiba Inu metaverse drive the price significantly higher, a tremendous number of tokens would need to be destroyed. That's highly unlikely and makes for a bad investment thesis.
For that reason, if you're looking for 412,000% returns, you're probably better off buying a lottery ticket. But if you want to invest in the crypto market, several digital assets have a much stronger investment thesis than Shiba Inu.