Shiba inu (SHIB) is an Ethereum-based ERC-20 token that has risen in popularity this year, largely because of its dog-themed ecosystem, speculation on its price by retail investors and strong community engagement. The official Shib Twitter account, for example, has over 1.2 million followers – more than leading crypto companies such as Cardano, Kraken and […]
Shiba inu (SHIB) is an Ethereum-based ERC-20 token that has risen in popularity this year, largely because of its dog-themed ecosystem, speculation on its price by retail investors and strong community engagement. The official Shib Twitter account, for example, has over 1.2 million followers – more than leading crypto companies such as Cardano, Kraken and Solana.
The digital asset was inspired by the Japanese breed of dog of the same name, which sparked a viral meme trend in 2013 and subsequently led to the creation of the infamous dogecoin cryptocurrency. Shiba inu, along with dogecoin and the hundreds of other pet-inspired digital assets, have become collectively known in the industry as “meme coins.”
Ordinarily, a meme coin offers owners little to no utility compared with more established cryptocurrencies such as bitcoin and ether. In the case of shiba inu, however, there seems to be a legitimate attempt by the development team to provide more value to SHIB holders, including launching a decentralized exchange in July.
— Shib (@Shibtoken) July 6, 2021
Notably, the desire to provide more utility to users has seen the self-proclaimed “doge killer” become the second-most popular meme coin in the market. And although the market capitalization of dogecoin is three times that of shiba inu at press time, the underdog project has managed to create and build up a large community in less than two years.
Key features of shiba inu
So other than being another doggy-themed cryptocurrency, what is the shib coin all about?
The first notable thing about Shiba Inu is its total supply. A total of 1 quadrillion SHIB tokens were minted during its official launch in 2020. A quadrillion is a number followed by 15 zeros. Some 50% of the supply of shiba inu was locked in Uniswap SHIB/ETH liquidity pool – a decentralized exchange where users deposit pairs of assets into liquidity pools that other investors can trade against. That is known as an automated market maker system.
Read more: What is an Automated Market Maker?
The other 50% of shib token’s supply was donated to Ethereum’s founder, Vitalik Buterin, who burned a vast majority of them by sending the tokens to a dead crypto wallet address. The remaining tokens (worth $1.2 billion at the time) were donated to an Indian COVID-19 relief cause and other charities.
The Shiba Inu universe also consists of a decentralized exchange, called Shibaswap, and two other tokens, “LEASH” and “BONE,” (see below.)
Finally, the community is also championing a rescue campaign for Shiba Inu dogs. All you need to do is make purchases on Amazon through smile.amazon.com and select Shiba Inu Rescue Association (a 501(c)3 as your preferred nongovernmental organization). This will allow a percentage of your purchase to be donated to a cause focusing on helping Shiba Inu dogs in need.
What is ShibaSwap?
Shibaswap is a decentralized exchange – a type of peer-to-peer trading platform similar to Uniswap that allows users to trade SHIB and other cryptocurrencies without an intermediary company. It also allows users to provide liquidity (deposit funds into pools that other traders can use to trade against) and stake tokens (deposit them into a wallet) to earn interest using shib token and two additional ERC-20 tokens that exist in the Shiba ecosystem:
- Bone ShibaSwap (ticker: BONE): Bone is designed to function as the platform’s governance token, with a total supply of 250 million coins. That means holders of bone tokens are able to propose and vote on changes to the Shiba protocol via its “Doggy DAO.” It’s also minted and rewarded to users who provide liquidity on the platform.
- Doge Killer (ticker: LEASH): This was originally launched as a rebase token (also known as an elastic token), a type of token similar to an algorithmic stablecoin where the supply automatically increases and decreases via a computer algorithm to keep its price pegged to another asset. In this case, leash’s supply is adjusted to track the price of doge at a rate of 1/1,000.
- For example, if the price of dogecoin was $0.05, the supply of leash would change (mint new tokens or destroy coins in circulation) to adjust the price of leash to $50.
Leash tokens have since been “unleashed,” and now no longer track the price of doge. With a scarce supply of just 107,647 tokens, leash has become the main store of value coin for many shiba inu owners.
On the ShibaSwap homepage, there are six functions available that incorporate the ecosystem’s three native coins, shib, leash and bone:
- Dig: Digging is the liquidity pool function on the ShibaSwap platform. Here, users can deposit crypto assets in pairs to existing liquidity pools on the platform, or create their own. As a reward, liquidity providers receive ShibaSwap liquidity pool tokens (SSLP). Those tokens represent their share of liquidity in the pool and entitle holders to receive free bone tokens upon redemption.
- Woof: “Woofing” is the function for redeeming bone rewards by cashing out SSLP tokens.
- Bury: This refers to where users can stake their shib, leash and bone in order to generate high-interest yields paid in bone tokens. At press time, the rates were 171%, 266% and 814%, respectively. Once staked, users receive a token that represents their staked amount in xSHIB, xLEASH or xBONE.
- 33% of bone rewards from staking are available immediately, while the remaining 66% are locked up for six months.
- Swap: This is the exchange feature of the ShibaSwap platform where users can swap between multiple assets.
- Bonefolio: This is an analytics dashboard where users can explore current interest rates and track their yield returns.
- NFTs: Here, users can trade 10,000 unique non-fungible tokens called “Shiboshis” – pixelated Shiba Inu dog cartoons similar to CryptoPunks with different traits, some rarer than others.
Who created SHIB coin?
Shiba Inu was launched in August 2020 as a direct competitor to Dogecoin. But unlike Dogecoin, the mysterious creator(s) of Shiba Inu, known as Ryoshi, made some design decisions that have since set the token apart. According to Ryoshi, SHIB has “the ability to outpace the value of dogecoin, exponentially, without ever crossing the $0.01 mark.” To put that into perspective, shib was trading for $0.00002831 at press time, which is a long way from $0.01. And yet, its market cap has already reached a third of Dogecoin’s market cap.
Read more: How Dogecoin Became So Popular
As noted above, following the launch of Shiba Inu, Ryoshi transferred half of the token’s total supply to Buterin, while the other half was locked in Uniswap, a decentralized exchange. As written in the project’s white paper, which the shib community calls the woofpaper, the goal was to transfer ownership of 500 trillion SHIB to Buterin with the hope he would lock them away forever.
The Elon Musk effect
The launch of Shiba Inu failed to gain traction at the beginning, but it began to make a splash around the same time Tesla CEO Elon Musk and other prominent individuals started to take interest in Dogecoin. Tech billionaire Musk in particular has been one of the most vocal supporters of Dogecoin. Dubbed the “Dogefather,” Musk was even voted as the project’s new unofficial CEO.
In the run-up to his appearance on “Saturday Night Live” in May, Musk hinted that he would mention Dogecoin during the show. That fuelled an unprecedented dogecoin price rally, which boosted the value of shib.
In five days, the price of shib increased by over 2,000%. The coin subsequently experienced a price slump along with the market-wide crash sparked by Musk’s announcement that Tesla would no longer accept bitcoin as a form of payment. It would later recover some of the lost value in the first week of October when Musk shared the picture and name of his new Shiba Inu puppy. All in all, SHIB’s price gained over 27,000,000% from January to October.
Floki Frunkpuppy pic.twitter.com/xAr8T0Jfdf
— Elon Musk (@elonmusk) October 4, 2021