What is Shiba Inu? Why is the burn rate important?

Shiba Inu (SHIB) is a meme cryptocurrency based on Ethereum, known as the “Dogecoin Killer,” which has garnered massive community support since its explosive rise in 2021. Its burn rate refers to the amount of SHIB that is destroyed and permanently removed from circulation over a certain period.

The logic behind token burning is simple: reducing supply can theoretically enhance scarcity, thereby exerting upward pressure on price. Therefore, the burn rate has always been regarded as one of the mechanisms supporting the long-term value of Shiba Inu.

Burn rate falls 82%: What happened behind it?

According to on-chain data from the Shibburn platform, the burn rate of Shiba Inu has fallen by as much as 82% in the past 24 hours compared to the previous day. Previously, the Shiba Inu community had initiated multiple concentrated burn campaigns, causing the burn rate to surge at one point. However, the current sharp decline may be primarily due to the following factors:

1. Community activity has weakened: the coin burning activities rely on spontaneous initiation by the community, and recently the market trend has been weak, leading to a decline in community participation enthusiasm.
2. Lack of incentive mechanisms: Currently, there are no effective incentive mechanisms to encourage continuous coin burning;
3. On-chain transactions decrease: A decline in user activity also means a reduction in on-chain transactions, which in turn reduces the number of mechanisms for automatic burn.

Immediate response of market prices

Figure:https://www.gate.com/trade/SHIB_USDT

The sudden drop in the burn rate has naturally raised market concerns. Data shows that after the announcement, the SHIB price slightly corrected in the short term, falling from $0.000017 to about $0.0000163, a decline of over 4%. This indicates that the market remains highly sensitive to changes in the burn rate. As of July 16, 2025, the SHIB price is approximately $0.0000136.

How should investors respond?

For current investors holding SHIB, it is most important to remain rational. Here are a few suggestions:

• Do not panic sell due to short-term changes in the burn rate: fluctuations in the destruction mechanism are normal, and long-term value should focus on the implementation of ecological applications and user growth.
• Pay attention to changes in on-chain indicators: such as the number of active addresses, DEX liquidity, on-chain transaction volume, etc.;
• Wait for clear market signals before taking action: the price has not yet shown extreme fluctuations, so you can patiently wait for a breakthrough in the technical or news aspects.

Summary and Outlook

The 82% decline in Shiba Inu’s burn rate is a noteworthy indicator change, but it does not imply that the SHIB project itself carries structural risks. Future trends will still depend on community governance, ecosystem expansion, and the overall market environment. Investors should remain vigilant and make rational decisions, and not be misled by a single indicator.