What is the Shiba Inu coin?

The next phenomenon on the crypto market is the Shiba Inu coin

Shiba Inu

What is the Shiba Inu coin? Source: shibatoken.com

While cryptocurrencies are on the rise, many new investors are seeking opportunities to join the market. However, trading BTC is quite expensive today. Hence, people are exploring different options, including lesser-known cryptos. As we’ve seen before, media hype can create value, even for joke tokens like Dogecoin.

If the name of this token leaves you in the dark, and you are wondering why the so-called “Doge Killer” is skyrocketing all of a sudden, keep reading.

About the project

The Shiba Inu coin traded as SHIB was launched only in August 2020. Its founders have been working on the idea for a while, but the increasing popularity of the Dogecoin must have triggered the concept’s practical implementation. The two tokens are constantly compared and treated as rivals, due to the same mascot – a Japanese Shiba Inu breed of dog.

The founding team of the Shiba Inu coin is headed by the person who goes by Ryoshi. Little is known about the personality behind that nickname. As the founder claims, “I am not important, and one day I will be gone without notice.”

The only clear thing is that Ryoshi loves the incredible Shiba Inu dog and encourages people to donate to the Shiba Inu Rescue Association. The developers call themselves “the Shib Army” as they treat the project as a revolutionary movement against traditional centralized economic systems.

Until now, centralization has been a prerequisite for all of our official structures. [...] There have been times in our history where this sort of internal structure played an important role, but in an age with the information of the world available at the click of a button, it’s time to rethink. [...] We believe through the power of collective decentralization we can build something stronger than a centralized team ever could create
From the Shiba Inu Coin Woof (White) Paper

Indeed, the team has far-reaching plans of creating the whole decentralized ecosystem running on the proprietary exchange ShibaSwap. ShibaSwap is currently undergoing security tests and audits, and getting final updates in preparation for a launch. SHIB is only a part of the ecosystem, whereas LEASH and BONE are other flagship tokens that will keep it viable.

LEASH is pegged to the price of Dogecoin and has a tiny total circulation of 107,647 tokens compared to the incredible 1 quadrillion of Shiba Inu coins released. It is a rebase token somewhat akin to stablecoins. Namely, it is designed to adjust the circulating supply automatically according to the token’s price fluctuations. However, the peg itself – Dogecoin – is not as stable as ETH or fiat currencies. Thus, LEASH’s stability is not expected to be anywhere near the well-established stablecoins. The BONE is yet to come, but it’s going to be an extra-special part of the ecosystem – its governance token.

The team is also going to eventually involve NFTs in the system. The Shib Army is inviting talented people to join their Shiba Artist Incubator and work on new art pieces that will be later sold as NFTs on ShibaSwap.

SHIB token

The SHIB coin was released in a great quantity of 1 quadrillion. 50% of the total supply went to the largest decentralized exchange Uniswap – a finance protocol that facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts. The founders claim to throw away the liquidity keys so that the tokens can never be withdrawn.

The remaining 50% was burned to Vitalik Buterin – one of the co-founders of Ethereum. Such a gift has probably been done partially out of respect for his vision but also as a publicity tactic. The “burning” purpose usually is to permanently remove the amount from circulation. Therefore, some investors probably expected Buterin to keep his Shiba Inu assets in cold storage. However, the recent news about the youngest crypto billionaire in the world donating about $1.2 billion worth of SHIB coins (over 50 trillion tokens) to the nonprofit organization India Covid Relief Fund caused panic on the crypto market.

Though Sandeep Nailwal, the founder of the Relief Fund, claimed “We will not do anything which hurts any community especially the retail community involved with SHIB”,  the crypto community has witnessed over a 35% drop in SHIB’s price within 24 hours after the announced donation.

At the moment of writing, the price of the Shiba Inu coin is $0.00001629. Throughout all of its existence, the lowest price was literally zero (till late January 2021), and the highest price was $0.0000388 (on May 10). Despite the minimal value, the huge amount of Shiba Inus released brings the token’s market cap as high as $2,416,786,787,428. Believe it or not, another meme coin outpaces even the total BTC market cap($2,248,800,176,606). Does it make it more influential than bitcoin? Unlikely.

The developers themselves had to buy tokens on the open market, ensuring a fair and complete distribution. No “team tokens” or “admin tokens” are available for influencing the market on paper. At the same time, considering the minuscule price and great amounts put on sale, anyone could have bought enough to become a major holder able to influence the market supply. According to Binance, the top #1, #2 and #5 wallets hold 50.5%, 7.0% and 3.0% of total supply respectively.

Moreover, let’s not forget that Buterin alone has the ability to single-handedly control the market and crash SHIB’s value should he decide to sell off his holdings. In any case, we can expect neither stability nor any underlying value from this new crypto asset. Nevertheless, it may have some potential if the connected exchange becomes popular and its ecosystem grows strong.

Besides, SHIB’s popularity reflects the common behaviors of a new, growing class of cryptocurrency traders. This is an important market trend that shouldn’t be ignored.

Rather than simply dismissing the hype outright, it’s important to realize that what we’re seeing is the mass movement of traders new to crypto moving into the space
Ben Caselin, head of research and strategy at cryptocurrency exchange AAX

Perhaps, that is why major crypto exchanges like OKEx, Binance, Huobi Global, KuCoin and others have started listing the Doge Killer. Meeting public demand is an important factor for any exchange functioning. Adding new popular assets gives exchange platforms an opportunity to draw the masses in search of new meme investments into all kinds of crypto trading.

What can you do with Shiba Inu coins?

At this time, the new crypto does not have any practical use. It is not tied to any physical asset, and it cannot even be directly purchased with fiat money. Perhaps, later you’ll be able to buy some NFTs with Doge Killer coins, or even a cup of real-life coffee. That depends on how well the team will stick to their initial plans. Yet, all you can do now is leverage the SHIB within its own ecosystem.

SHIB can be buried (staked) for rewards, dug for BONEs, and swapped for another token. When Shibas dig (farm), bury or swap, generated returns go to the so-called Puppy Pools. The pools then distribute the rewards proportionally to the holders.

Certain Puppy Pools are eligible for double and triple rewards. Namely, when you stake your Shiba Inu tokens for governing Bones, 3% of all BONE per block goes to the xSHIB pool that also holds 0.3% of all ETH Swap transaction fees. Thus, you get double return. xLEASH holders are part of the xLEASH Pool and get 0.5% of all BONE per block. Whereas the LEASH SSLP token holders gain 0.3% of all WBTC swap transactions along with 0.3% of all USDC swap transactions. That triples staking returns.

In addition, you can buy and sell SHIB at selected exchanges that support the token. For instance, at Binance you can exchange SHIB for Binance USD stablecoin (BUSD).

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