SHIB Faces Challenges as Token Burns Drop and Ecosystem Stalls

Shiba Inu (SHIB) is under increasing scrutiny as key mechanisms supporting its value proposition weaken. Token burns have dropped by 89.96%, with just 1.09 million tokens burned in the last 24 hours. This trend threatens SHIB's deflationary appeal.

The broader Shiba Inu ecosystem is also struggling. Promised developments, such as a metaverse and blockchain infrastructure, have stalled. Projects like Shibarium have failed to gain traction, with total value locked (TVL) consistently below $1 million. Developer inactivity and unresponsive leadership have further eroded trust.

A significant portion of investor concern relates to governance issues. Key developers operate under pseudonyms, and unresolved problems like the Shibarium exploit remain unaddressed. These factors highlight a lack of accountability and transparency.

What Is Behind the Drop in SHIB Token Burns?

Token burns have long been a core mechanism for reducing SHIB's supply and increasing scarcity. However, the recent decline of 89.96% in burn rates indicates a loss of momentum. This decline raises questions about whether the burn strategy can continue to drive value in the long term.

The reduced burn rate weakens SHIB's utility and appeal as a speculative asset. With a circulating supply of 589.5 trillion tokens, the sheer volume dilutes the impact of even large burn events. Analysts suggest this undermines any potential for price stability.

How Is Shiba Inu Addressing the Plasma Bridge Exploit?

Shiba Inu has introduced a tokenized debt framework called 'Shib Owes You' (SOU) to address user losses from the Plasma Bridge exploit. This framework converts losses into Ethereum-based NFTs, creating a secondary market for distressed debt claims. This move aims to introduce on-chain accountability and liquidity for affected users.

The SOU framework also enforces strict consolidation of ecosystem revenue to fund repayments. Projects using the Shiba Inu brand must contribute earnings to a restitution pool. Those that fail to generate revenue may be paused or shut down.

Despite these efforts, the SOU infrastructure is not yet operational. Users are advised to avoid third-party scams and wait for the official launch. The system has undergone security audits by Hexens, but execution remains a critical test of credibility.

What Do Market Trends Indicate for SHIB's Future?

SHIB has dropped 64.5% year-to-date as of December 2025. A technical death cross has formed, indicating bearish momentum. This decline reflects broader market conditions and the coin's lack of real-world utility.

Investor sentiment is mixed. While some remain optimistic about community-driven recovery, others question the project's ability to deliver long-term value. Analysts caution that without functional infrastructure or institutional adoption, SHIB remains a high-risk asset.

The broader crypto market also shows signs of weakness. Google search interest for 'crypto' has hit a one-year low, signaling reduced retail engagement. Bitcoin's prolonged consolidation and the collapse of high-profile memecoins have contributed to this shift.

Despite these challenges, Shiba Inu's SOU initiative represents a step toward structured financial accountability. Whether it can restore confidence and attract new users remains to be seen.