- Shiba Inu appeared in 2020 as another meme cryptocurrency and owed its popularity primarily to retail investors who were looking for low-cost tokens. The pseudonymous founder of the project positioned it as a “Dogecoin killer. And while Dogecoin grew by 3,100% in 2021, the token under the SHIB ticker grew by 49,000,000%.
But after the rapid growth of SHIB and the subsequent price pullback, the crypto market is asking a question: what awaits the cryptocurrency next? To answer it, let’s look at the history, technological aspects and further plans of the project.
The beginning of Shiba Inu
Shiba Inu is a relatively new project, as the first version of its technical description (known as WOOF paper) was released in April 2020, just three months before the SHIB token was released in August. The project was intriguing for several reasons.
First, its developer Ryoshi used a pseudonym – much like bitcoin author Satoshi Nakamoto. The original technical description was published on Github.
Despite the healthy skepticism that surrounded the cryptocurrency meme because of its anonymity, Ryoshi seems to have been motivated by the idea of decentralization. He received nothing from the initial token offering, which is confirmed by Etherscan.
Rioshi also claimed that he started the project as a volunteer and did not spend any money on it. He purchased all of the potential SHIB assets in his possession on the open market.
During the launch, about 50% of SHIB tokens were sent to Ethereum founder Vitalik Buterin’s wallet, possibly as a publicity stunt. Buterin claimed that he was previously unaware of the transaction, and sent 90% of the tokens he received to a non-existent address to withdraw them from circulation. They were worth about $6.7 billion at the time.
Buterin specified that he “burned” the tokens to reward the long-time owners because he was impressed with how “the community was treated by the donations.” Buterin donated the remaining SHIB to CryptoRelief India and other charities.
What is Shiba Inu?
Shiba Inu was launched as an experiment. The goal was to create a decentralized project out of a spontaneous community.
“We believe that through the power of collective decentralization we can create something stronger than a centralized team ever could. A community-driven token is nothing without unified people giving it purpose,” Ryoshi wrote.
On the technical side, SHIB is an ERC-20 token built on the Ethereum blockchain, which means that Shiba Inu does not have its own blockchain network. Thus, the SHIB token is dependent on Ethereum solutions. The increased demand for the token will lead to an increase in network traffic and fees.
Rioshi chose Ethereum as the basis because it was already secure and established, and “to ensure that his project is free to change and evolve without any external rules affecting it.”
While the lack of a dedicated blockchain may be a barrier for some investors, there are advantages to using an established network. First, Shiba Inu benefits from robust security, performance and an active Ethereum development team.
It also allows Shiba Inu to inherit all the advanced smart contract features of the Ethereum network. Ultimately, this will make it easier to implement Shiba-related DeFi applications.
Shiba Inu is already leveraging these advanced DeFi capabilities with Shibaswap, a DeFi platform that allows users to generate passive income by providing liquidity, stacking and exchanging tokens. Shibaswap also offers access to new NFT and crypto market-specific tools like portfolio trackers.
Shiba Inu Economy
There are three cryptocurrencies in the Shiba Inu ecosystem, all of which are ERC-20 tokens built on Ethereum:
- Shiba Inu ($SHIB),
- Leash Dogecoin Killer ($LEASH),
- Bone ($BONE).
SHIB is the flagship token of the Shiba Inu ecosystem. It originally had a huge initial supply of 1 quadrillion before Vitalik Buterin burned through 410 trillion tokens. SHIB owners can bet or bury their tokens to earn BONE as a reward. SHIB network members also earn 0.1% of all ETH swap fees on ShibaSwap.
LEASH is the second token in the ecosystem. It has a high dollar value because of its relatively low supply of 107,646 tokens. LEASH owners can place the token and use it to provide liquidity for the LEASH-ETH pair to earn BONE tokens.
The third token is BONE with a fixed supply of 250 million tokens. BONE will function as a network management token, providing a vote on future offerings within Doggy DAO, which is scheduled to launch in 2022.
BONE will also be issued as a reward for staking and providing liquidity on ShibaSwap. In addition, BONE can also be floated to receive greater rewards in the form of BONE tokens and used to provide liquidity for the BONE-ETH trading pair, rewarding liquidity providers with 0.1% of all DAI and USDT swap revenue.
What makes Shiba Inu different from others?
The first thing that makes Shiba Inu stand out is that it started as an experiment to test the spirit of collective decentralization. Moreover, the development team had no percentage of dedicated tokens, making it one of the first cryptocurrencies with a decentralized token offering.
It remains to be seen whether Shiba Inu will be better than projects created by centralized teams. But it has already proven to be more than just another fading memcoin.
Another differentiating factor is community management with Doggy DAO. This allows users with at least 30,000 BONE to make suggestions that the community can vote on. Doggy DAO is an important step for Shiba Inu towards full decentralization.
Third, the project is developing ShibaNet, a decentralized marketplace with a “methodology for collecting, trading, buying and selling in a fully decentralized way. The trading floor will have the ability to distribute residual payments or royalties between parties using interchangeable tokens. The system also allows royalties to be distributed automatically via blockchain.
ShibaNet plans to introduce a SHI stabelcoin tied to the U.S. 1 cent, which will be used to buy goods and services.
Shiba Inu began as a meme cryptocurrency with a pseudonymous founder. It’s not a good combination for an industry notorious for scammers. Nevertheless, the project has gained credibility thanks to a democratized token distribution and a system that gradually transfers control to the community through DoggyDAO.
Second, Shiba Inu is an ERC-20 token, which means it does not have its own blockchain and is exposed to the same market congestion and gas prices as Ethereum transactions. As a result, transaction processing delays due to Ethereum’s growing popularity are likely to limit Shiba’s performance.
To address these shortcomings, Shiba Inu is developing its own blockchain network called Shibarium. In addition to increasing network capacity, Shibarium aims to reduce transaction fees and “ensure that other products and services have a simple, cheap and easy platform to create.”
Ben Casselin, head of research and strategy at AAX, notes that he is concerned that Shiba Inu’s price has steadily increased over the past few years.
“Shiba Inu has thrived on hype, crowd dynamics and the same macro-level inflationary pressures that have driven up prices across all asset classes. ShibaSwap and similar applications allow meme cryptocurrencies to leverage the demand for serving programs, but given Ethereum’s high gas rates, it hardly makes economic sense to host Shiba or use its features,” he argues.
Caselin also expresses concern that Shiba Inu may not make it into the club of common crypto-assets.
Shiba Inu has a number of projects underway, including its own blockchain network, Shibarium, and the SHI Stablecoin. There is no predetermined launch date for Shibarium, but it will add various new use cases, increase overall transaction throughput and reduce transaction fees.
The Shiboshis Social Club is for owners of SHIBOSHIS, a collection of 10,000 NFTs created by Shiba Inu that were sold out shortly after launch in October 2021. NFT owners will eventually be able to participate in a strategy game on Shiboshis The Game, though no release date has been given.
Shiba Inu is also working on its own Shibverse meta-universe.
What’s in store for Shiba Inu? Surely the modest image of an inexpensive and close to everyone meme coin will help it continue to remain popular with crypto investors who are tired of other technically complex and often confusing crypto projects.