Over 310,000 ICP tokens have disappeared in the past month—burned, gone forever. That’s more than the first three years of burns combined. A steady 10,000 ICP vanishing daily suggests something big is brewing in the Internet Computer ecosystem. The blockchain that once struggled with adoption now seems to be shifting gears, and at this pace, the very structure of its tokenomics could be rewritten.
The burn mechanism at play is simple in concept but powerful in execution. The Internet Computer converts ICP into cycles, the fuel that powers smart contracts known as canisters. Developers buy cycles to keep their applications running, and every purchase burns ICP, permanently reducing supply. At the same time, new ICP is minted to reward network participants, but if burns keep outpacing minting, the entire network starts to lean deflationary.
In its early years, the burn rate was unimpressive. Between 2021 and 2024, the network saw only 170,000 ICP burned, a reflection of slow developer adoption. The total value locked (TVL) in its DeFi ecosystem remained modest, and cycle consumption followed a predictable, linear path. Then came 2025.
In just 30 days, the Internet Computer burned almost double its previous three-year total. The network now hosts over 879,670 canisters—up 135% from last year—fueling an 8,800% increase in cycle consumption. A single project, BOB.FUN, is responsible for 90% of these burns, an eye-watering statistic that highlights how quickly things are moving. With its compute-heavy operations, BOB.FUN alone has the potential to drive ICP into full deflationary territory if its activity scales further.
The rapid expansion of the canister ecosystem explains much of the surge. Developers are finding it easier to deploy smart contracts, with recent protocol upgrades lowering barriers to entry. Enterprises are stepping in too, using the Internet Computer for decentralised cloud computing as an alternative to Amazon Web Services. The result? A spike in demand for cycles and a relentless burn of ICP.
Governance and staking dynamics are another factor. Over 250 million ICP are locked in neurons, taking a large chunk of tokens out of circulation. While staking rewards introduce new ICP into the market, the current burn rate suggests that those newly minted tokens are struggling to keep up with the pace of destruction. Analysts are now questioning whether the network could become structurally deflationary as early as 2026.
If the burn rate holds steady at 10,000 ICP per day, the network could see 3.65 million ICP disappear annually. That would leave a deflationary gap of 750,000 ICP each year—a 2.6% contraction in circulating supply. In a more aggressive scenario, where canister adoption grows by 30% per month, burns could hit 10 million ICP annually, reducing supply by as much as 7% a year. Conversely, if developer momentum stalls or rival blockchains like Ethereum and Solana pull ahead, the burn rate could slow, tempering expectations.
Still, something fundamental is changing in the Internet Computer ecosystem. With demand for computation skyrocketing, and ICP tokens disappearing faster than ever, the deflationary shift might not be a question of if—but when.
