Shiba Inu: The Doge-Inspired Upstart Memecoin

Dogecoin, Memecoins, and Shiba Inu

Dogecoin’s (DOGE) rapid rise captured the attention of investors and mainstream audiences around the world, which inspired developers of similar projects to work to replicate Dogecoin’s success.  In the ever-expanding universe of memecoins, Shibu Inu (SHIB) has emerged as an unexpected standard bearer among the multitude of cryptocurrencies inspired by Dogecoin. But apart from championing an adorable dog mascot, the Shiba Inu crypto project bears little resemblance to Dogecoin — particularly in terms of tokenomics and its intended purpose.

More specifically, though Shiba began as a lighthearted blockchain trial run involving full community governance, the project has since made serious attempts to differentiate itself from Dogecoin and other meme projects by establishing a multifaceted ecosystem with clearly stated use cases. According to the project’s “Woof Paper” — a play on the term “whitepaper,” a type of prospectus issued by most blockchain projects at their inception  —  Shiba’s current goal is to further the adoption of blockchain technology through a number of enterprises.

ShibaSwap: ShibaSwap is a decentralized exchange (DEX) currently in development by Shiba Inu. The project represents the clearest indication that Shiba Inu has loftier ambitions than developing memecoins. ShibaSwap is designed to create a safe and user-friendly environment to trade cryptocurrencies in a fully decentralized manner. As of early 2021, little has been publicized about how the DEX will differ from platforms already on the market. ShibaSwap is currently conducting security tests, audits, and final updates.

Community charity: A significant delegation of the Shiba crypto community has committed to donating a portion of the proceeds from their personal purchases made on Amazon to the Shiba Inu Rescue Association. (An undisclosed percentage of SHIBA purchases go to this charity.) This is made possible through Amazon’s “Amazon Smile” feature, which lets users automatically donate to a nonprofit of their choice with each Amazon purchase.

Artists’ incubator: Shiba intends to launch a non-fungible token (NFT) marketplace with the support of artists from a wide range of genres and creative styles. Though several artists have already signed up to participate in this initiative, Shiba has not yet released details about the NFT project’s next stage of development.

Given the above-cited initiatives in development, it’s evident that the Shiba Inu crypto project has real aspirations regarding tech development and community initiatives. Significantly, however, Shiba’s dramatic price movements can be influenced by sentiment-driven speculation and investor FOMO. While this may be the case for other cryptocurrencies, it’s particularly true when it comes to memecoins like DOGE and SHIB, which are heavily tied to pop culture. Nonetheless, SHIB has attracted a remarkable level of investor interest. As of May 2021, more than 400,000 crypto wallets held SHIB tokens.

Shiba Inu’s Three-Token Structure

While many assume that Shiba Inu was established in 2021 as a direct reaction to the remarkable market growth of Dogecoin, the project was actually created in August 2020 by an anonymous individual known as “Ryoshi.” Shiba Inu is built on the Ethereum blockchain and has three separate and interoperable tokens within its ecosystem.

Shiba Inu’s primary token is SHIB, an ERC-20 token with a fixed supply of one quadrillion tokens. In addition to SHIB, the Shiba crypto ecosystem also includes the LEASH token, and eventually will feature a third token called BONE. LEASH was initially designed to be a rebase token with a flexible market cap pegged to the price of DOGE, but the team later decided to launch LEASH as an ERC-20 token with a fixed supply of 107,647 tokens. Shiba Inu’s BONE token serves as the ecosystem’s governance token; users’ voting power scales linearly in proportion to the amount of BONE they hold.

Though the potential use cases of SHIB and LEASH have yet to be laid out in full, once ShibaSwap goes live, users will be able to stake any of these tokens to receive BONE tokens with each newly confirmed block, in addition to other tokenized rewards.

The Shiba Inu Crypto Airdrop: Vitalik Unleashed

Shiba Inu’s novel tokenomics have invited scrutiny, particularly with regard to the circulating supply of SHIB. When launching the SHIB token, the Shiba crypto team locked 50% of the token’s total supply in Uniswap and destroyed the keys to create a permanent base of SHIB market liquidity. The team then sent the remaining 50% of the total SHIB token supply to the ERC-20 wallet of Ethereum founder Vitalik Buterin. This daring and novel endeavor was intended as an informal burning mechanism, and a marketing ploy. No tokens were reserved for Shiba’s founders and developers. With this unique approach, the Shiba Inu crypto team believed that they had executed a fair and open token launch in a new way. This token launch triggered immediate headlines around the world and inspired several other memecoin projects to send Buterin similar airdrops.

However, the Shiba community’s hopeful assumption that Buterin would not touch his tokens proved misguided. On May 12, 2021, Buterin abruptly donated 10% of his SHIB stack to an India Crypto Covid Relief Fund created by a co-founder of Polygon. These tokens were valued at around $1.2 billion USD at the time and the donation immediately made headlines as one of the largest ever acts of charity paid out in cryptocurrency. That same day, Vitalik also sold off several other memecoins that had been airdropped to him, and donated the funds to various non-profit organizations. The price of SHIB dropped dramatically following Vitalik’s selloff.

Then, on May 16, 2021, Buterin burned the majority of his remaining SHIB tokens — roughly 410 trillion, or 41% of the total SHIB supply — and left a message in the transaction hash stating that he would donate his remaining SHIB holdings to a yet-undecided charity at a later date. While some fans of dog memecoin projects were irked, Buterin went on to publicly praise charitable memecoin communities like Shiba Inu for their generosity and eagerness to make the world a better place. He also urged projects to cease airdropping coins and tokens to him without permission, reiterating the importance of avoiding rewards to “kingmakers” who could have the power to single-handedly make or break a blockchain project.

Will the Shiba Inu Crypto Project Rocket to the Moon?

The meteoric rise and public tribulations of the Shiba Inu crypto endeavor have attracted considerable attention. SHIB has been no exception to the often dramatic market volatility of memecoins, but still boasts a multi-billion-dollar market cap, continues to attract a large and passionate following, and is working towards a roadmap that could result in significant long-term functionality and value to the crypto ecosystem.