Shiba Inu (SHIB) burning rate is soaring, but there is a major hidden danger behind it

Recently, the burning rate of Shiba Inu (SHIB) has soared wildly, and some single-day burning volumes have even reached hundreds of millions of coins, which has attracted widespread attention in the market. In theory, the strengthening of the burning mechanism will reduce the circulating supply and increase the scarcity of each SHIB, thereby driving up the price of the currency. But don't rush to get excited, the hidden dangers behind it are worth our deep consideration.

First, the surge in the burning rate is more driven by speculative behavior rather than the increase in actual ecological demand. Although burning can reduce the supply of tokens, if the market heat decreases, the burning effect is likely to be a short-term "mirage". Lacking continuous use cases and real user needs, SHIB is still prone to return to speculative attributes.

Secondly, large-scale burning is beneficial to existing large positions, but it may put pressure on ordinary investors. When the deflationary effect appears, whales will profit from the huge amount of coins they hold, while retail investors may find it more difficult to grasp the buying and selling opportunities due to market fluctuations, and they are easily harvested.

The most critical hidden danger is that the development pace of the SHIB ecosystem cannot keep up with market expectations. At present, although SHIB has its own Layer 2 network (Shibarium) and payment scenario support, the progress of technology upgrades and practical applications is slow. If these ecological constructions cannot support the market expectations brought by the burning, investors' confidence may be greatly hit.

The soaring SHIB burning rate is certainly exciting, but investors should calmly evaluate the long-term value of this wave of "deflation effect". After all, digital currencies without real application support are just castles in the air. Be cautious in entering the game and do what you can to truly gain a foothold in the currency circle.