XRP’s Reduced Burn Rate Could Weaken Scarcity Case and Pressure Support Around $2.99–$2.83

• XRP burn rate collapsed to single-hundreds per day as of Sept 21, 2025.

• XRP burns come only from transaction fees, which are minimal and inconsistent.

• Key technical supports at $2.99 and $2.83 must hold to avoid deeper declines.

XRP burn rate decline weakens scarcity case for XRP; read expert analysis and technical levels to watch. Stay informed with COINOTAG updates.

XRP’s burn rate has significantly dropped, leaving its scarcity argument weaker and raising questions about the token’s long-term price growth.

Key Insights

• XRP’s burn rate has drastically reduced, with only 163 tokens burned in a single day as of September 21.
• XRP’s lack of a protocol-driven burn mechanism limits its ability to reduce supply and create scarcity.
• XRP faces downward price pressure, with key support levels at $2.99 and $2.83 that must hold to avoid further declines.

XRP’s burn rate has seen a significant decline in recent months, leaving some to question its long-term sustainability. While other tokens have adopted explicit burn programs or protocol burns, XRP burn rate is tied solely to transaction fees and has not removed supply at a meaningful scale.

XRP transaction fees are typically under a cent, and a portion of the fee is destroyed per transaction. That mechanism produced only 163 XRP burned on Sept 21, a stark drop from early-August peaks when network activity spiked. The decline in the XRP burn rate reduces the token’s scarcity argument and increases reliance on external demand drivers.

What is the current state of the XRP burn rate?

The XRP burn rate has fallen markedly, with daily burns in the low hundreds as of Sept 21, 2025. This reflects low fee generation from routine transactions and means burns are insufficient to curb a ~60 billion circulating supply without additional protocol changes.

How does XRP’s burn mechanism work?

XRP burns are executed by removing a small part of transaction fees from circulation when a ledger closes. There is no EIP-1559-style base-fee burn or large community token burn program for XRP. As a result, supply reduction is directly proportional to transaction volume and fees, which remain minimal.

Source: TradingView

Why does the burn decline matter for XRP’s price?

Burns create scarcity that can support price when demand is steady or rising. With the XRP burn rate near negligible levels, scarcity-driven appreciation is unlikely unless transaction volume or fees increase dramatically, or the protocol introduces a burn-oriented mechanism.

What technical levels should traders watch?

XRP is trading in a downward channel. Analysts identify key supports at $2.99 and $2.83. A decisive break below these levels could confirm further downside, while holds and rebounds may shift focus back to demand catalysts rather than supply compression.

Frequently Asked Questions

How many XRP are burned daily now?

Daily burns have fallen into the low-hundreds, with a reported 163 XRP burned on Sept 21, 2025. This contrasts with higher burn days during earlier spikes in on-chain activity.

Can XRP adopt a protocol-level burn like Ethereum?

XRP currently lacks a protocol proposal equivalent to EIP-1559. Any protocol-level burn would require broad consensus and development, and as of the latest update no such mechanism has been implemented.

Key Takeaways

• Burns are minimal: Transaction-fee burns are too small to materially cut supply.
• Scarcity argument weakens: Without protocol change, supply-driven appreciation is unlikely.
• Watch technicals: Support at $2.99 and $2.83 will be critical for price direction.

Conclusion

Data shows the XRP burn rate has dropped to negligible levels, reducing the potency of any scarcity narrative. Short-term price action will depend on demand catalysts and technical support holds. Monitor on-chain metrics and network fee trends for signals; COINOTAG will continue to track developments and update readers.

XRP burn rate decline weakens scarcity thesis; 163 burned on Sept 21. Read COINOTAG analysis and monitor supports at $2.99 and $2.83 for next moves.