Last week, Shiba Inu (SHIB), the second largest meme coin by market capitalization, experienced a significant extraction of over 2 trillion SHIB tokens, sparking controversy within the crypto community regarding the token holders and their intentions.
According to on-chain data published on Twitter (X) by the cryptocurrency analyst Ali, the number of SHIB tokens deposited on exchanges decreased from around 82 trillion to the current value of 80.77 trillion on August 22nd.
#ShibaInu | A staggering 2 trillion $SHIB tokens have been pulled from known #crypto exchange wallets just this past week. pic.twitter.com/MiWMNUp7jY
— Ali (@ali_charts) August 27, 2023
This substantial token extraction was accompanied by a 10% price surge over the past week, with the price rising from a low of $0.00000757 to a value of $0.00000835.
Why are investors withdrawing their tokens from exchanges?
As recently reported by ZyCrypto, the Shiba Inu development team is working to elevate the project’s status from being a mere meme coin without utility to becoming an integrated ecosystem featuring decentralized applications that contribute real value to the crypto landscape.
It remains unclear who is behind these extractions or why they decided to withdraw such a significant number of tokens from exchanges. Speculations range from investors possibly waiting for a token rebound when the crypto market recovers while others continue to predict the decline of the meme coin.
What is certain is that the withdrawal occurred one week after the launch of Shibarium, a layer-2 network developed by the Shiba Inu community on the Ethereum blockchain, designed to address scalability issues for the token.
Shibarium Bounces Back With Improved Scalability
The loss or locking up of more than 1.7 million Ethereum during the launch presented a considerable scalability issue, leading to the closure of Shibarium until August 28th. It was subsequently reopened with assistance from Polygon, which provided resources and direct support to resolve the problem and ensure the success of the relaunch.
According to the developers, the problem stemmed from excessive server load on the network, resulting in operational limits being exceeded.
Fund withdrawals from Shibarium to Ethereum are now available after two weeks of work. Transaction processing times vary depending on the token, ranging from 4 to 45 hours. However, withdrawals of BONE, the native currency of the network, can take up to 7 days to process.
As of the time of writing, the price of SHIB remains at $0.00000815, having seen a 1% increase over the last 24 hours and nearly 3% over the past 7 days, as shown by CoinGecko’s data.
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