Shibarium’s Sharp Decline Sparks Doubt in Ecosystem’s Long-Term Viability

Shiba Inu’s Shibarium, the Layer-2 blockchain supporting the Shiba Inu ecosystem, has experienced a sharp decline in daily activity, despite maintaining a cumulative transaction count above 1.5 billion as of September 5, 2025. Over the previous week, daily transaction volumes dropped from nearly 4 million on August 23 to approximately 10,000 on August 29, a decline of 99.75%. Although the figure rose slightly to 30,000 by August 30, it remains well below August’s averages, signaling a significant imbalance in network usage [2]. The discrepancy highlights a growing concern for the project’s long-term sustainability and adoption potential [2].

The token’s burn mechanism has also faced a sharp slowdown. In the last 24 hours, the burn rate dropped by 80.32%, with only 220,504 SHIB tokens burned, compared to a total of 1.386 billion burned over the week [1]. The burn process, designed to reduce supply and create upward price pressure, has seen diminishing returns as transaction volumes and active participation wane [2]. This trend suggests weakening ecosystem engagement and may contribute to a broader downward pressure on SHIB’s price, which has fallen 7.7% over the past week [2].

Despite the drop in daily activity, Shibarium has maintained a cumulative total of 1.544 billion transactions since its inception. The platform continues to support 290,171 active accounts, 271.994 million addresses, and 29,860 smart contracts, indicating that the underlying infrastructure remains robust. Additionally, BONE transfers averaged 4.469 million per day, showing some continued activity within the ecosystem [1]. However, the sharp decline in transaction volumes raises questions about the network’s ability to sustain user interest and developer activity in the long term [2].

Community activity remains a key asset for Shiba Inu, with SHIB ranking as the third most active meme project on social media platforms. The project reported 15.6 thousand engaged posts and 791.6 thousand interactions, underscoring the strength of its decentralized community [1]. Nevertheless, the recent technical issues with Shibarium have caused uncertainty among investors, many of whom are now closely watching whether the network can address these challenges effectively [2].

The situation has also sparked speculation about the cause of the network’s decline. While no official explanation has been provided, users and analysts have suggested potential causes, including technical failures, network congestion, or internal errors [2]. As the Shiba Inu ecosystem moves forward, the ability to restore transaction throughput and maintain a consistent burn rate will be critical in regaining investor confidence and supporting the project’s broader utility ambitions [2].

Source: [1] Shiba Inu Ecosystem Surging with Energy and Momentum (https://magazine.shib.io/shiba-inu-ecosystem-surging-with-energy-and-momentum/) [2] 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)