Thursday, September 29, 2022
No menu items!

What is the Shiba Inu token?

Must Read

The Shiba Inu token was the first to overtake Bitcoin as the most popular cryptocurrency of the year. The self-proclaimed “dogecoin killer” made all the headlines after its prices went up tenfold during October 2021. In fact, big names such as Elon Musk and Vitalik Buterin have also contributed to Shiba Inu’s unstoppable hype train.

So what is Shiba Inu?

How did its market capitalization jump from 3 Billion to 41 Billion in just 4 weeks? Shiba Inu is an ERC-20 token that lives and breathes on the Ethereum blockchain. Founded by Ryoshi in August 2020, Shiba Inu was the answer to the question: “what if a crypto project was fully run by its community?” It showcases a Shiba Inu puppy otherwise known as the Japanese hunting dog. Touted as the “Dogecoin killer”, Shiba Inu is primed and ready to surpass Dogecoin once and for all. In fact, Shiba Inu’s market cap actually did overtake Dogecoin for a brief moment in time.

But that is not surprising at all considering the power of the SHIBarmy and the Shiba Inu Ecosystem. By now, most of you are probably dying to figure out how Shiba Inu jumped from 3 Billion to 41 Billion in market cap in just 4 weeks! Was it a pump and dump scheme? Or was it just the power of memes?

Shiba Inu: history

To understand what really happened we have to travel back to the start of 2021. At this point in time, Shiba finally got listed on major exchanges. This grew the community and improved liquidity at the same time as investors could finally trade Shiba on their favorite exchange. Then Shiba got its big break thanks to Ryoshi who sent 50% of the entire Shiba supply to the founder of Ethereum – Vitalik Buterin. To be honest with you, it was a make or break move done by Ryoshi which somehow turned out for the best.

Vitalik ended up selling $1 Billion worth of Shiba to donate the money to a Covid-19 relief fund in India. In case you’re wondering, that’s about 50 trillion Shiba tokens. This generated huge headlines for Ryoshi’s little experiment. Some of those headlines were negative, however. Especially because Vitalik still held 45% of the entire Shiba supply. The thing is, Vitalik could sell his giant stack at any time and drop the price of Shiba down a massive cliff, leaving all Shiba investors with a big fat loss.

As a result, Shiba was quite a risky investment as Vitalik already dropped the price by 30% during his first sell transaction. However, Shiba’s second miracle came to life as Vitalik actually burnt a staggering 40% of all Shiba tokens. Thanks to Vitalik’s kindliness, the ball finally started rolling.

A second catalyst was created upon the start of ShibaSwap that offered investors opportunities to farm some extra money by locking up their Shiba tokens. In addition to reducing the selling pressure, ShibaSwap improved liquidity, created awareness, and became the major driving force behind the Shiba Inu ecosystem.

Then, the Shiba rocket finally took off after cryptocurrency’s loudest voice Elon Musk decided to tweet about his newly adopted Shiba Inu puppy. And, as you might have guessed, hordes of big-shot investors immediately began spending millions of dollars to buy Shiba Inu. As a result, FOMO aka fear of missing out was created and a large number of retail investors aped in as well.

So what came out of all this?

An interesting statistic says that if you had bought Shiba on the 1st of January 2021 and sold it on the 27th of October, you would have made an insane return of 121,000,000% In terms of numbers this means that if you bought $1 worth of Shiba on New Year’s Eve, you would have made $121 Million on the 27th of October.

So what is the purpose of Shiba Inu? What utility does it provide to its investors? Well, according to the “woofpaper”, one can generate returns using their SHIB tokens through the ShibaSwap exchange. On ShibaSwap, users can stake tokens by “burying’, provide liquidity by “digging”, and exchange tokens by “fetching”.

As of right now, ShibaSwap has three major tokens: Shiba Inu, BONE, and LEASH. By using these dog-themed strategies, you can generate returns in the form of a token called $BONE. Let’s take a look at each of these strategies. Staking refers to depositing your tokens in a lockup for a period of time. This is done to receive staking rewards according to an APY or an APR.

If you bury (stake) your SHIB tokens, ShibaSwap will reward you with xSHIB – a token that proves you have actually staked your Shiba Inu tokens. After a period of time, you will be rewarded with BONE and a percentage of all the Ethereum transaction fees generated by ShibaSwap.

However, if you choose to stake LEASH, you will be rewarded with BONE and a percentage of all the swap fees generated by ShibaSwap. These swap fees are generated on transactions within ShibaSwap that exclude Ethereum, Wrapped BTC, DAI, USDC, and USDT

The second strategy offered by ShibaSwap is liquidity farming. Liquidity refers to how easy it is to convert an asset to another asset without causing huge price fluctuations. If ShibaSwap pairs have low liquidity pools, the pairs will suffer from high volatility and instability. For example, users may find a hard time converting Shiba Inu to Ethereum without losing money thanks to slippage.

That’s why providing liquidity in the form of digging is a great strategy to help out ShibaSwap. To provide liquidity, you will swap your SHIB for SHIB SSLP which is a placeholder token that you can swap back to SHIB at any time. By the way, SSLP stands for Shiba swap liquidity provider token.

Users can then passively earn BONE. However, there is an additional reward if you dig LEASH instead. LEASH diggers receive 0.1% of all Wrapped BTC and USDC transactions. What’s exciting about LEASH is that it is the most expensive token in the entire ecosystem. Pretty awesome for a token named the “DOGECOIN KILLER”.

An important thing to remember is that you will only receive 33% of your rewards after you stop burying or digging. The rest of the rewards will be dealt six months after. Bone is the newest token to enter the ecosystem and its purpose is to maintain governance of the ShibaSwap decentralized network.

What is governance?

ShibaSwap’s governance allows the community to propose, manage, and implement new changes that will reflect through ShibaSwap. To vote for a change you will need BONE tokens that grant users voting powers. Since Shiba Inu aims to be a DAO aka a Decentralized Autonomous Organization, it wants everybody to share ideas and make all the decisions using their BONE tokens.

The best thing about DAOs is that it allows a project to not be controlled by a centralized organization. This is very important because there are countless reports of centralized institutions such as banks getting in the way of user transactions.

And one thing I forgot to mention is that, the more BONE tokens you have, the higher your voting power. Although you can sell bone tokens for a profit on your investment, it may be a wise decision to hold these tokens so that you can have a say regarding the direction the project is going in.

For example, if there is a vote that aims to push forward Shiba metaverse instead of pushing forward SHIBA NFTs, you can use your bone tokens to change the tides in your favor.

Future of Shiba Inu

An important question to ask is: “What’s next for Shiba Inu?” After that insane pump, people began to think of Shiba as a pump & dump token. But that couldn’t be further from the truth as there are many ways to utilize the token to generate returns, participate in governance, interact with the shibARMY, and much more awesome stuff.

Although the token is more than 70% below its all-time high, there is very little doubt that this is only due to the bear season we are in right now. If there wasn’t so much geopolitical tension around the world, it’s very possible that Shiba Inu would’ve broken it’s all-time high.

As of right now, Shiba Inu’s circulating supply has around 539 Trillion tokens. This is almost half of its 1 Quadrillion total supply. With its market cap sitting at 12 Billion right now, investors predict that it could go up to 50 Billion during the next bull cycle.

If its market cap did jump to 50 Billion the price of one shiba inu would be $0.0001 which is almost 80% higher than what it is today. This will be the most surprising thing you will hear today but there are a large group of investors who predict that the price of Shiba Inu will hit $0.01.

For this to happen Shiba Inu would have to gain a market cap of around $5.6 Trillion. It’s pretty easy to throw numbers around but can Shiba Inu accomplish the impossible one more time? Who knows? In the world of crypto, you can expect the most unimaginable things to happen.

Especially when investors made over a 100 Million % return by just holding Shiba Inu. With Ryoshi and his team are constantly innovating and presenting new and improved strategies to utilize Shiba, there is a strong possibility that Shiba will massively reduce its sell pressure and surpass dogecoin once and for all.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest stories

Flux: cross-chain Oracle on NEAR Protocol

Flux protocol is a cross-chain oracle aggregator that supplies economically-viable information to smart contracts. Smart contracts are pieces of code...

More Articles Like This