XRP Burn Rate Plummets: What's Behind the Crash?

XRP Burn Rate Suffers Drastic Crash

XRP's burn mechanism, a feature designed for long-term supply control within the network, is currently under scrutiny due to a significant decline in daily burns, nearing almost zero. Data from CryptoQuant reveals a sharp decrease in burn activity, which once removed thousands of XRP coins from circulation daily. This substantial reduction raises questions about the impact of XRP burns on the cryptocurrency's overall tokenomics.

Burn Activity Plummets

The volume of XRP burns has decreased considerably in recent months, with burn activity being almost nonexistent in August and September. A detailed chart from CryptoQuant illustrates the historical trends in XRP burn activity and the shifts observed since the start of the year.

In December 2024, there was a brief surge in burns, exceeding 15,000 coins in a single day, coinciding with heightened network activity. This momentum extended into the early months of 2025, during which burn levels stabilized at a moderate yet consistent rate, fluctuating between 2,500 and 7,500 XRP per day.

However, by late August, the activity had declined to record lows, falling below 1,000 tokens per day and persisting at these depressed levels throughout September. Current data indicates that only 400 to 750 XRP are being burned daily, a figure that is relatively small given the token's extensive supply of over 60 billion.

The XRP burn mechanism differs from other popular crypto burns like Shiba Inu. Rather than implementing large, periodic burns, XRP employs a continuous, small-scale burn mechanism. Each transaction processed on the XRP Ledger incurs a minimal fee (set at a minimum of 0.00001 XRP), which is then permanently destroyed. This mechanism ensures that every transaction contributes to supply reduction, but the effect is only significant when transaction volumes are consistently high.

The substantial decrease in XRP burns, therefore, reflects not only the burn slowdown but also lower levels of transactions on the XRP Ledger, particularly compared to Q4 2024. In essence, the burn statistics serve as an indicator of current on-chain activity.

XRP Price Defends $2.8 Level

Interestingly, XRP's price action in recent months has not mirrored the collapse in burns. The price of XRP has shown rallies, reaching a new all-time high of $3.65 in July.

However, at the time of writing, the altcoin has retraced by over 20% from that all-time high. Recent price action over the past seven days saw the altcoin break below $3 again after rejecting an earlier rally between $3.18 and $3.15. Nevertheless, it appears that XRP bulls intervened around the $2.8 support level to prevent further declines.

Currently, XRP is trading at $2.88, following a 2.2% rebound in the past 24 hours.