Shiba Inu (SHIB) originally started as a meme currency in an experiment carried out by a decentralized spontaneous community. The aim of the experiment was to see if it’s possible for a crypto project to be run solely by its community. Judging by the SHIB success (the currency is in the 13th position on CoinMarketCap), it could be said that the experiment has been successful.
For those who are unfamiliar, meme coin or a meme currency is a cryptocurrency that was created as a reaction to a specific meme – a tweet, image, or video posted on the internet. Memecoins are extremely volatile as their value depends on the reactions of the internet community.
Still, based on boom of Shiba Inu and Dogecoin, the two most popular memecoins, we may infer that crypto enthusiasts, particularly young ones, simply love them. Let’s see why it’s among the top 10 cryptocurrencies worth including in your portfolio.
What is Shiba Inu (SHIB)?
Shiba Inu (SHIB) is an altcoin built on Ethereum that features the Shiba Inu—a Japanese hunting dog breed—as its mascot. Shiba Inu is frequently referred to as a Dogecoin alternative, i.e., Dogecoin killer. The guiding principles of the Shiba Inu ecosystem are presented on a “woof paper”—possibly an alternative to “whitepaper” that is accessible on the ShibaToken official website.
In the paper, the team behind the Shiba Inu revealed three main reasons for creating SHIB:
- “We started from zero, with zero.”
- “The brilliant minds behind Shib had never collaborated before.”
- “We love Shiba Inu Dogs.”
Getting to know SHIB
A total of 1 quadrillion (1+ 15 zeros) SHIB tokens were initially available. In May 2021, the SHIB developer known only as “Ryoshi” handed half of the total supply to Vitalik Buterin, one of the Ethereum blockchain’s co-founders. However, Buterin immediately burnt 90% of his tokens, removing them from circulation for good. He gave the remaining 10% to a charity.
Unlike other cryptocurrencies how burn their token supply on a regular basis, the total supply of SHIB is never limited via burning or halving mechanisms.
Being a meme coin, SHIB is extremely prone to price swings. In fact, its price frequently makes news headlines because it consistently notches enormous gains and suffers similarly extreme losses. The value of memecoins can be affected by literally anything, news, influencers’ comments, even tweets.
Elon Musk, the CEO of Tesla, is mostly to blame for the market momentum influencing SHIB. He was also responsible for the enormous price increase of Dogecoin. Namely, Musk’s attraction to Dogecoin drove the market’s interest in SHIB. Musk even got a Shiba Inu puppy named Floki Frunkpuppy, which triggered additional price surges.
What is Shiba Inu (SHIB) used for?
Memecoins generally have very little to no utility. Shiba Inu, on the other hand, has an entire ecosystem of products and services involving decentralized exchange called ShibaSwap . It also has a community-driven rescue effort for Shiba Inu dogs.
Shiba Inu encompasses several tokens that support the ecosystem. Needless to say, all tokens are related to canines:
- Shiba Inu (SHIB),
- Leash (LEASH),
- Bone (BONE).
SHIB is the predominant currency of the Shiba Inu project with the total supply of 1 quadrillion tokens. Users can swap SHIB with any Ethereum-based (ERC20) tokens.
LEASH, a second token in the ecosystem, has a very limited total supply of 107,646 tokens. Originally, LEASH was a rebase token pegged to the value of SHIB’s main rival, Dogecoin (DOGE). The supply of a rebase token is configured to grow or shrink in order to modify the token price without changing the value of anyone’s portion of the coins. This gives rebase tokens a flexible monetary base. Later, the rebase mechanism was permanently disabled, and the token’s ERC20 design was restored.
BONE is available only on ShibaSwap, a Shiba Inu decentralized exchange. With the total supply of 250 million tokens, BONE is supposed to “mediate” between SHIB and LEASH in terms of circulation supply. BONE is a governance token that enables the Shiba Inu community (known as ShibArmy) to vote on proposals regarding the ecosystem. The more tokens users possess, the more weight their vote will carry during the decision-making process.
Shiba Inu ecosystem
The ecosystem includes several products and services:
- Shibaswap, a decentralized exchange (DEX) which allows users to trade crypto without restrictions typical of centralized exchanges;
- Shiba Inu Incubator, formerly known as the Artist Incubator, enables artists in the community to build artworks and express their creativity;
- Shiboshis, NFTs (non-fungible tokens) built on the Shiba Inu ecosystem and stored permanently on the Ethereum blockchain. To be unique and collectible, each Shiboshi has its distinctive features. Shiboshis can be traded on ShibaSwap and OpenSea, the well-known NFT platform without fees.
What is ShibaSwap
The huge and possibly unexpected boom of Shiba Inu urged its creators to develop an extra project – ShibaSwap. As mentioned above, this is a DEX similar to other platforms such as SushiSwap and Uniswap.
Why not trade but swap? What is the difference between the two?
The two are pretty similar. However, it became apparent in 2017 that there was a need for “swapping” tokens rather than trading them. Typically, a trader would normally utilize Bitcoin (BTC) or Ether (ETH) to purchase or sell altcoins via conventional exchange. “Atomic swaps” allow for instant exchange of cryptocurrencies between various blockchains without middlemen, order books or custodians.
In addition to swapping digital assets on ShibaSwap, users also have an opportunity to:
- Stake SHIB, LEASH, and BONE, or to one of them to obtain BONE tokens (Bury);
- Provide a liquidity pool (Dig);
- Cash out liquidity pool tokens and redeem BONE rewards (Woof).
Shiba Inu canine lingo
Meme coins’ rejection of standard procedures is part of what appeals to crypto enthusiasts. This unique approach may even imply using different technology to define return strategies. In the case of Shiba Inu, to keep up with the canine concept, the project’s woof paper employs dog-friendly language to explain how to reap returns from SHIB tokens.
So, users can employ their tokens to “dig” (provide liquidity), “bury” (stake tokens), or “fetch” (exchange tokens). According to the woof paper, tokens employed in these tactics produce “Woof” returns as BONE tokens that are allocated to token pools known as “Puppy Pools.”