What is Burn Rate and why is it important?

For meme coins like Shiba Inu (SHIB) with a high circulating supply, the Burn Rate is at the core of its deflationary logic. By continuously transferring SHIB to a black hole address for destruction, the project team and community aim to gradually reduce the circulating supply, thereby increasing the scarcity of each token and its potential price support.

An increase in the burn rate usually attracts market attention, while a sharp decline or drop to zero can easily trigger panic, especially against the backdrop of the current market’s high volatility expectations for Meme coins.

The background of Shiba Inu burn rate is 0%

According to data from early July, the mainstream burning tracking platform Shibburn shows that the 24-hour burning rate of Shiba Inu has dropped to 0%. This data quickly spread across major social media and news websites, with the keyword “Shiba Inu Burn Rate Down to 0%” becoming a hot topic of discussion.

At the same time, the price of SHIB also fell from a high of around $0.000013 to $0.00001035, coming close to the low point at the end of June.

Technical issue or real on-chain?

It is important to note that although the burn rate is 0%, it does not mean that the community has actually stopped burning SHIB. On-chain data shows that approximately 20 million SHIB were actually burned that day. This suggests that the anomaly in the display is more likely due to a statistical error or an API reporting failure.

In addition, Shibburn itself analyzes the burning situation through on-chain smart contract address analysis. If there are block confirmation delays or indexing failures, it may also create the illusion of “displaying as 0”.

The current performance of SHIB price and market reaction

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

After the message spread, the price of SHIB significantly dropped, falling from the range of 0.00001270 to 0.00001035 in the short term. Although there was a rebound afterwards, it still has not returned to the key resistance level.

Technical analysis shows that SHIB is currently testing the support range of $0.00001130, while breaking through the EMA26 daily moving average of $0.000013 is the key resistance level for a short-term rebound.

How should investors understand this event?

For ordinary investors, it is advisable to avoid being misled by a single piece of data. It is recommended to adopt the following strategies:

1. Refer to multiple sources of data: don’t rely solely on Shibburn, but also pay attention to on-chain tools like Etherscan and WhaleStats.
2. Don’t be controlled by emotions: an abnormal burn rate may be a technical issue, and you shouldn’t blindly sell off.
3. Focus on whale movements: Data shows that large addresses are accumulating SHIB, possibly positioning for long-term burning dividends.
4. Focus on ecological development: The application and upgrades of the Shibarium Layer 2 network will bring new burning entry points.

Market Forecast and Opportunity Outlook

The burning mechanism is one of the long-term value supports of the SHIB ecosystem. Although the market reacted negatively due to the short-term impact of the “drop to zero” event, if Shibarium is further promoted and on-chain applications increase, the burning rate is expected to return to a high level, and the price may also迎来 a new round of recovery.

Conclusion: Don’t let a burn rate of “0%” scare you; what’s more important is to see the real on-chain dynamics and long-term logic behind the data.