#Binance

Many investors wonder: if reducing token supply boosts price, why haven’t meme coins like PEPE, SHIB, or DOGE just burned enough tokens to push their price to $1? Here’s a simple breakdown—complete with expert insights—on why massive burns are rarely attempted and rarely effective for these coins.

#writetoearn

How Token Burns Work

A token burn permanently removes coins from circulation, shrinking supply. In theory, if demand stays constant while supply drops, price should rise.

Example:

Imagine a pizza cut into 100 slices. If you eat (burn) 50 slices and ten people still want a slice, each remaining slice is worth more—because there are fewer slices to go around.

Why Meme Coins Face a Burning Challenge

  1. Enormous Supply:SHIB launched with 1 quadrillion (1,000,000,000,000,000) tokens. Burning even 1% (~10 trillion tokens) barely dents overall supply. At current prices, that cost would be astronomical—hundreds of millions of dollars at today’s rates.

  2. Unlimited or Inflationary Models:DOGE has no maximum supply; miners can create new coins every block. A burn today is partly offset by new issuance tomorrow.

  3. Lack of Central Control:Decentralized communities govern these coins. Coordinating a massive, voluntary burn requires broad consensus—and many holders prefer to keep tokens, hoping for individual gains.

Expert Insight:

Andrew Kang (Co-founder, Mechanism Capital) notes, “For SHIB to hit $1 via burning alone, you’d need to remove over 99.9999% of its supply—an impractical feat without centralized authority and massive capital”.

Has Burning Ever Worked?

  • Binance Coin (BNB):BNB performs quarterly burns, using exchange profits to buy and destroy tokens. Over time, this helped BNB’s price appreciation. But BNB started with just 200 million tokens—tiny compared to meme coins.

  • Terra Luna Classic (LUNC):After the 2022 crash, the community burned many LUNC tokens to restore scarcity. While burns reduced supply by billions, price recovery remained modest and tied to broader ecosystem fixes, not burning alone.

Expert Insight:

Linda Xie (Co-founder, Scalar Capital) explains, “Burns can signal commitment to scarcity, but they must be paired with real demand—like utility or revenue—to move the needle. One-off burns without use cases rarely sustain price gains”.

Why PEPE, SHIB & DOGE Aren’t Burning More

  1. No Revenue Streams to Fund Burns:BNB burns rely on exchange earnings. Meme coins lack centralized revenue—no fees or profits—to finance large-scale token repurchases and burns.

  2. Focus on Utility & Community Growth:Projects like SHIB are building layer-2 networks (Shibarium) and NFTs, betting that real use will drive demand—rather than one-time burns.

  3. Regulatory Uncertainty:Large coordinated burns might attract scrutiny: is it a market-manipulation if a whale or group artificially inflates price? Many developers avoid actions that could be deemed manipulative.

Expert Insight:

Ari Paul (CIO, BlockTower Capital) warns, “Token burns can backfire: if holders expect regular burns, they hoard instead of using or trading, stalling ecosystem activity. Sustainable models need utility, not just deflation”.

Conclusion: Burns Alone Aren’t a Silver Bullet

While burning tokens can help reduce supply, meme coins’ massive or infinite supplies make impactful burns impractical without centralized capital and authority. Experts agree that building real-world use cases, fostering developer ecosystems, and growing organic demand are far more effective strategies for long-term price appreciation than hoping for a “burn to $1” shortcut.