XRP's Burn Rate Plummets to Near Zero: What's Driving the Discrepancy?
The XRP Ledger's burn mechanism, designed to control the token's long-term supply, is facing an unprecedented challenge as daily burn rates have collapsed to negligible levels. This dramatic slowdown in token destruction raises questions about on-chain activity, especially given XRP's recent, albeit volatile, price performance.
Burn Activity Falls Off a Cliff
On-chain metrics from CryptoQuant reveal a significant downturn in XRP burn activity over the past few months, reaching near nonexistence in August and September. While December 2024 saw a brief peak of over 15,000 XRP burned daily amidst high network activity, and early 2025 maintained a steady pace of 2,500 to 7,500 XRP burns per day, figures have since plummeted. By late August, daily burns dropped below 1,000 tokens, and current numbers hover between a mere 400 to 750 XRP daily. This amount is virtually insignificant when compared to XRP's massive supply exceeding 60 billion tokens. The XRP burn mechanism permanently removes a small fee (minimum 0.00001 XRP) from circulation with every transaction, making high transaction volumes essential for meaningful supply reduction. The current low burn rates therefore serve as a direct indicator of significantly reduced activity on the XRP Ledger.
XRP's Price Shows Unexpected Resilience
Despite the alarming crash in burn rates, XRP's price action has not mirrored this decline, showcasing a puzzling divergence. The altcoin managed a notable rally in recent months, even hitting a new all-time high of $3.65 in July. Although it has since retraced over 20% from that peak, briefly breaking below the $3 mark, XRP bulls appear to have found strong support around the $2.8 level, preventing further significant drops. At the time of writing, XRP is trading at $2.88, reflecting a slight 2.2% rebound within the last 24 hours. This suggests that while the burn statistics clearly reflect a slowdown in on-chain transaction volume, other market factors or investor sentiment might be contributing to its sustained price levels, at least in the short term. The burn rate ultimately acts as a mirror to the ecosystem's underlying transactional vitality.
