Shiba Inu (SHIB) is one of the most popular meme coins in the crypto market, but its recent performance has raised some doubts about its sustainability. According to data from Etherscan, the weekly burn rate of SHIB tokens has dropped to its lowest level since August, indicating a decline in demand and activity.
The burn rate is the number of tokens permanently removed from circulation, usually by sending them to a dead address. This reduces the total supply and increases the scarcity and value of the remaining tokens. Burning often rewards holders creates deflationary pressure, and incentivizes transactions.
Shiba Inu has a burn mechanism that sends a portion of the fees from transactions on ShibaSwap, its decentralized exchange, and other platforms supporting SHIB, such as NowPayments and Shopping.io, to a burn address. The project also burns SHIB tokens when it launches new products, such as NFT collections or games.
However, the data shows that the weekly burn rate of SHIB has fallen from a peak of over 2.1 billion tokens in mid-October to just 173 million tokens in the last week of November. This represents a more than 90% decrease in less than two months. The total amount of SHIB burned so far is about 41.1 billion tokens, only 0.82% of the initial supply of 5 quadrillion tokens, reported Utoday.
The drop in the burn rate coincides with a decline in the price and trading volume of SHIB, which reached an all-time high of $0.000088 on October 28 but has since fallen by more than 50% to $0.000042 at the time of writing, according to CoinGecko. The trading volume of SHIB has also decreased by more than 80% from a peak of over $21 billion on October 27 to about $4 billion on November 29.
The lower burn rate and market activity suggest that the hype around Shiba Inu is fading as investors lose interest and move on to other projects. Some analysts have attributed this to the lack of innovation and differentiation of SHIB from other meme coins, such as Dogecoin (DOGE) or Floki Inu (FLOKI), which have similar features and target audiences.
Shiba Inu may need new ways to attract and retain users, such as launching more products, partnerships, and marketing campaigns or introducing more incentives and benefits for holders. Otherwise, it may face further downward pressure and competition from other meme coins vying for attention and market share.