Key Takeaways
- Shibarium launch faces bridge issues; millions in tokens stuck.
- SHIB’s price is down 9%, 53% below its recent high.
- Layer-2 networks, including Shibarium, face challenges in the early stages.
The much-anticipated launch of Shiba Inu’s layer-2 scaling solution, Shibarium, has not gone as smoothly as planned.
Just hours after the mainnet went live on Aug 16, the network’s bridge started experiencing major issues. This has resulted in millions of dollars worth of tokens getting stuck and the inability to transfer funds between Ethereum mainnet and Shibarium.
As per blockchain security firm PeckShield, around 956 ETH (nearly $1.7 million) and $750,000 worth of BONE tokens are locked in the faulty Shibarium bridge contract.
The bridge is a crucial component that enables the transfer of tokens & assets between the two networks. Its malfunctioning has crippled the network causing growing dissent among Shiba Inu investors.
While lead developer Shytoshi Kusama has acknowledged the problem, details remain scarce. As per updates on community platforms like Discord and Telegram groups, the Shibarium team is actively working on a fix, but no ETA is available.
Understandably, the technical snag has yet to inspire confidence among SHIB investors. Prices have taken a sharp hit since the mainnet launch. SHIB is down nearly 9% in the last 24 hours, trading at $0.000008985.
The steep correction has wiped out nearly two weeks of gains made in the run-up to the Shibarium release.
SHIB’s price action in the last 24 hours: Coinmarketcap
Shiba Inu Price Falters Amid Uncertainty
SHIB’s price trajectory over the past month has been closely tied to developments around the Shibarium launch. The token rallied from $0.000007 on July 27 to $0.000012 on August 14, gaining over 70% in value.
However, the euphoria quickly faded as the scaling solution went live. With the network rendered unusable temporarily, prices have snapped back sharply. SHIB is currently trading 53% below its recent high two days back.
The sharp price reaction underscores how much of SHIB’s valuation was based on the speculative appeal of Shibarium. For a token dogged by accusations of being just a meme coin, the layer-2 network was a chance to showcase its technological capabilities. However, the stuttering start risks eroding investors’ confidence.
Shibarium’s Rocky Debut Adds to Crowded L2 Landscape’s Teething Troubles
Shibarium is the latest layer-2 network to fall prey to initial tech troubles. Ethereum’s various scaling solutions, like Optimism and Arbitrum, have also faced growing liquidity and congestion issues.
It highlights the challenges of building robust bridges between the main chain and secondary networks. As more projects follow the layer-2 route, potential bridge vulnerabilities remain a concern.
However, Shibarium’s priority is fixing the bridge and restoring transfers as soon as possible. The network has potential, but its success will depend on how quickly and effectively the team resolves the current problems. Until the technical uncertainty subsides, SHIB prices may drop as investor appetite dampens.
SHIB/USD Technical Analysis: Bearish Sentiment Prevails
The SHIB/USD 4-hour chart shows the token trading in a downward channel since the August 14 high. Prices have remained below the 20-period moving average for most of this period, indicating bearish sentiment.
SHIB/USD daily chart on TradingView.com
The Relative Strength Index (RSI) has also dropped from near-overbought levels to under 47, suggesting that bears are in control. A break below the key support of $0.000009 could open the doors for a deeper correction. On the upside, SHIB must retake $0.000012 and then $0.000014 to confirm a trend reversal.
