Shiba Inu Burns 9.6M Tokens in 24 Hours as DAO Governance Takes Hold

Shiba Inu’s transition to a decentralized autonomous organization (DAO) governance model has triggered one of the largest token burn events in its history. Following the commencement of the DAO elections, the burn rate of SHIB tokens surged by 3,464% compared to recent averages. Over 9.6 million SHIB tokens were burned within a 24-hour window, significantly reducing the circulating supply. This activity aligns with ongoing efforts to decentralize governance and enhance token value through supply-side adjustments [1].

The elections, which began in mid-August 2025, are token-weighted, meaning that the influence of each voter is proportional to the number of SHIB they hold. This has raised concerns over centralization, as large token holders—often called “whales”—exert disproportionate control over the governance process. Critics argue that this undermines the project’s stated objective of full decentralization, even as it seeks to appoint an interim "Network State President" and establish DAO councils to lead the ecosystem [2].

Market reactions have been mixed. While the burn event has contributed to a 3.27% price increase in SHIB over the past 24 hours, the token also experienced a 5.85% price drop shortly after the election announcement. Analysts remain divided on the long-term implications. Some, like Javon Marks, predict a potential 156% price rally if current technical patterns hold, while others note that historical token burns have typically led to short-lived price spikes [3]. The effectiveness of the burn strategy in driving lasting value will depend on broader adoption and the utility of the Shiba Inu ecosystem [4].

The burn mechanism itself works by removing SHIB from circulation with each transaction, effectively reducing total supply. This scarcity-driven model is also employed by other major cryptocurrencies like Binance Coin (BNB), though success varies across projects. The increased burn rate has been driven by higher network activity, which in turn suggests greater engagement from the community [5].

Despite the governance shift, challenges remain. The enormous supply of SHIB—over 1 quadrillion tokens—combined with uneven distribution, raises questions about the practicality of decentralized governance. While Shytoshi Kusama, the lead developer, has emphasized that the elections represent a crucial step toward decentralization, the extent to which this translates into real-world decentralization is yet to be determined [6].

As the Shiba Inu ecosystem continues its evolution, the impact of these governance changes will depend on the balance between supply reduction, active community participation, and the development of meaningful use cases. The next phase of the project’s development will be closely watched by both investors and developers, particularly as the community-driven model faces its first major test under the new DAO structure.

Sources:

[1] Shiba Inu Elects President in Governance Shift Toward ... (https://www.ainvest.com/news/shiba-inu-elects-president-governance-shift-dao-model-2508/)

[2] Whales hold the voting power as Shiba Inu considers ... (https://www.mitrade.com/au/insights/news/live-news/article-3-1017147-20250806)

[3] Shiba Inu Pulse: Steady Growth, Fierce Momentum ... (https://magazine.shib.io/shiba-inu-pulse-steady-growth-fierce-momentum-unstoppable-pack/)

[4] Shiba Inu Price | SHIB Price index, Live chart & USD ... (https://www.okx.com/price/shiba-inu-shib)

[5] Latest Shiba Inu (SHIB) News Today (https://thecryptobasic.com/tag/shiba-inu/)

[6] 19 Next Cryptocurrencies to Explode in 2025 (https://99bitcoins.com/cryptocurrency/next-crypto-to-explode/)