Floki Inu, a meme coin birthed by fans and the SHIB community, has joined the class of rising coins. The meme coin has seen tremendous performance over the past few hours after its governing DAO issued an important developmental proposal.
The coin is a strict Shiba Inu competitor, hence the name “Shiba Inu-Killer.” Being the people’s cryptocurrency (governed by a decentralized autonomous organization), Floki received a community proposal to burn an enormous number of its circulating tokens. After the proposal issuance, FLOKI saw a massive price increase of 25%.
Reason Behind Floki Inu Performance
Initially, Floki Inu’s developers proposed a change in governance that would sweep out nearly $55 million worth of FLOKI from circulation. They also want to reduce the tax that users pay for transacting on the network. Finally, the proposal cited potential safety hazards associated with bridges as an additional reason to burn so many tokens.
Reports stated that over $2 billion either got misplaced or stolen from cross-chain bridges alone in 2022. Therefore, the safety reason cited by the developers is valid.
Token burn is a means by which blockchain developers remove some coins permanently from circulation. It aims to reduce the total circulating token supply and increase the asset’s value, provided demand does not change.
The proposal stated that news of hack exploits indicates the risks from cross-chain bridges, especially ones with a large amount of tokens supply. It also said that any attack on Floki Inu’s primary cross-chain bridge would have a tremendous impact on the project.
The fact that the said bridge holds 55.7% of FLOKI’s entire circulating supply is even more reason to consider the proposal. Moreover, if bad players exploit the vulnerability, it would see the sweeping of Floki Inu’s liquidity pools and consequently crush the project.
According to the report, Floki Inu first performed its token minting on Ethereum, with a total supply of 10 trillion FLOKI coins. Later, in response to the community’s request, they moved the minting site to the BNB chain in 2021, making the process faster and cheaper.
Following historical data, token burns often raise an asset’s value by reducing the number of tokens in circulation, thereby making the token scarce.
Most tokens, like Shiba Inu, BNB, etc., undergo burning. Even Shiba Inu experienced a significant rally a few days ago when the token burn surged 613%. The high expectation of an increase in value after the proposed token burn could be the reason behind the recent price surge.
Floki’s Price Outlook
Due to the growing bullish sentiment surrounding the token, its market cap and 24-hour trading volume have increased by 20%. Floki Inu’s market cap is currently $118 million, while its trading volume is $4 million. The rising market capitalization and trading volume indicate a growing interest in the FLOKI market.
Floki Inu is trading at $0.00001694 with a low of $0.00001350. The token has seen significant rallies like most cryptocurrencies this year.
Floki Inu has seen a 7-day price rise of 26%, a 51.1% 14-day rally, and a 53.2% 30-day surge. If the proposed token burn happens, FLOKI might see more push in the coming days.
Featured Image from Pixabay, Charts by Coinmarketcap
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