Shiba Inu’s Burn Surge Can’t Mask the Fading Hype

Shiba Inu’s burn rate surged by 201,207% in the last 24 hours, according to data from Shibburn, with 4.56 million SHIB tokens burned during the period. This sharp increase in burn activity is part of Shiba Inu’s deflationary mechanism aimed at reducing the token’s circulating supply and potentially driving up its value. However, the actual volume removed—4.56 million SHIB—remains relatively small compared to SHIB’s total supply of 589.247 trillion tokens. Analysts note that while the burn rate spike is notable, its direct impact on SHIB’s price remains uncertain.

The burn activity comes amid broader challenges for the Shiba Inu ecosystem. The project’s Layer-2 blockchain, Shibarium, experienced a drastic decline in activity, with daily transactions plummeting from approximately 4 million on August 23 to just 10,000 by August 29—a drop of 99.75%. Although transactions slightly rebounded to 30,000 on August 30, the overall trend remains concerning. This decline in network activity has coincided with a sharp drop in the burn rate, which fell 80.32% in the same timeframe, with only 220,504 SHIB tokens burned in the last 24 hours. The slowdown raises questions about the sustainability of Shiba Inu’s utility and adoption as a blockchain platform.

Despite the recent burn surge, Shiba Inu’s native token, SHIB, continues to face downward pressure. As of the latest data, SHIB is trading at $0.00001234, down 7.7% over the past week. The token has lost much of its momentum gained in August, and the broader network issues, including Shibarium’s collapse, have added to investor uncertainty. The price remains highly volatile, and analysts caution that the current burn rate, while significant, may not be sufficient to reverse the downward trend without broader adoption or a resolution to the network issues.

Further complicating the situation is the high degree of supply concentration among Shiba Inu’s top 10 holders. According to Santiment data, these addresses control 62.3% of the total SHIB supply. The largest of these is the official burn address, which holds 410.43 trillion SHIB, followed by major exchanges such as Binance and Robinhood. This concentration of supply raises concerns about potential market manipulation, although experts note that most of these holdings are either in burn wallets or centralized exchanges rather than individual wallets. The high degree of centralization means that any large-scale sell-offs could have a significant impact on SHIB’s price.

The Shiba Inu burn mechanism operates by periodically sending SHIB tokens to a designated burn address, effectively removing them from circulation. This process is transparent and can be tracked on the Ethereum blockchain. The burn rate is intended to create scarcity and reduce supply, which in theory should increase demand and drive up the price. However, as the recent data indicates, this mechanism may not be sufficient on its own to counteract broader market trends or network-level issues such as the decline in Shibarium’s activity.

Investor sentiment has also been affected by the broader market environment and the lack of clarity surrounding the cause of Shibarium’s collapse. Until the developers provide an explanation for the sudden drop in transactions, investors remain cautious. The uncertainty has led to speculation that the outage could be due to technical failures, network congestion, or internal errors. For a project that was once seen as a major step toward Shiba Inu’s long-term utility beyond its meme coin status, this setback is particularly significant.

Overall, while Shiba Inu’s burn rate has seen a dramatic spike, the broader ecosystem faces multiple challenges that may limit the effectiveness of the deflationary mechanism. Investors and analysts will be watching closely to see whether the recent burn activity can contribute to a price reversal or if the project will need to address its network and utility issues to regain traction.

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[1] Shiba Inu's Shibarium crashes 99.7%, burn rate plunges 80% (https://www.thestreet.com/crypto/markets/shiba-inus-layer-2-shibarium-crashes-99-9-faces-major-setback)

[2] What is Shiba Inu Burn Rate and its Impact on SHIB ... (https://www.tokenmetrics.com/blog/shiba-inu-burn-rate?74e29fd5_page=2)

[3] Santiment shows Shiba Inu Top 10 Addresses Hold Over ... (https://thecryptobasic.com/2025/09/03/santiment-shows-shiba-inu-top-10-addresses-hold-over-62-of-shib-supply/)

[4] Shiba Inu Breaks Burn Rate Limit With ... (https://u.today/shiba-inu-breaks-burn-rate-limit-with-201207-surge-will-price-follow)

[5] Top 10 Wallets Control 62.3% of Shiba Inu and 51% ... (https://cryptorank.io/news/feed/38c18-10-wallets-control-62-percent-shiba-inu-supply)