XRP Faces Ecosystem Paralysis as Burn Rate Plunges 75%, “Scarcity Value Disappears”

▲ XRP / ChatGPT-generated image

XRP’s network activity has plunged more than 25% over the past week, while its token burn rate—considered a key indicator of ecosystem vitality—has dropped by 75%.

According to crypto-focused outlet U.Today on February 18 (local time), the number of active addresses on the XRP network fell დაახლოებით 26% over the past week to 40,778. As a result, the amount of XRP burned through transaction fees also declined by roughly 75%. U.Today analyzed that such a drop in on-chain metrics is a significant signal that both real payment demand and overall network usage of XRP are contracting simultaneously.

The XRP Ledger employs a burn mechanism that permanently destroys a small portion of transaction fees whenever a transaction occurs, making network activity directly proportional to the burn rate. The recent sharp decline in the burn rate indicates extremely low transaction activity within the network, suggesting that the long-term price-support mechanism—reducing supply to increase scarcity—is not functioning properly. Experts warn that if this trend continues, it could have a serious negative impact on investor sentiment.

Amid volatility across the broader digital asset market, XRP’s particularly notable decline in activity raises doubts about the fundamental strength of its payment utility. The drop in active addresses goes beyond a simple decrease in transaction volume, signaling that liquidity provisioning across the ecosystem may be weakening. This suggests reduced momentum for a potential price rebound. As institutional investors focus more on Bitcoin (BTC) and Ethereum (ETH), criticism is mounting that XRP’s independent payment competitiveness is diminishing.

The recovery of network activity is expected to be a key determinant of XRP’s future price direction. A rebound in the burn rate is directly linked to an increase in network users, meaning ecosystem expansion and growth in real-world use cases must come first. Market participants are closely watching whether this decline in activity will prove to be a short-term correction or the beginning of a longer-term downturn.

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