What is Shiba Inu coin: Purpose, ecosystem and history of SHIB cryptocurrency
There’s no stopping the growth and development of meme coins in the cryptocurrency space.
This is due to several factors, but the main ingredient to their success is the backing of a strong community rather than real-world utility. For instance, Elon Musk was a supporter of a dog-themed cryptocurrency called Dogecoin that gained traction due to his frequent tweets about dogs and cryptocurrencies.
In this article, we’ll try to learn if the SHIB coin has a purpose, the story with Shiba Inu’s total supply and explore Shiba Inu vs. Dogecoin.
What is a SHIB coin?
Shiba Inu is the original Japanese dog breed used as Dogecoin’s symbol. The Shiba Inu ecosystem is based on the guiding principles described in the “woof paper,” the canine version of a white paper that highlights cryptocurrency project outlines and roadmaps. SHIB is an Ethereum-based ERC-20 token, and Ethereum was chosen over other platforms because it is already robust, secure, well-established and allows for actual decentralization.
Its popularity and success are mainly due to the large cryptocurrency community of SHIB supporters, the so-called ShibArmy, and online influencers that help pump the price. The cryptocurrency official Twitter account, for instance, is followed by 2.2 million people, more than other top coins like Solana (1 million followers) or Cardano (1.1 million followers), or even Ethereum (1.9 million followers). Overall, SHIB’s price gained over 27,000,000% from January to October 2021.
For a long time, the SHIB token has been regarded as a pump and dump cryptocurrency, mainly because it’s been hard for users in the real world to grasp its utility. However, its website mentions that the Shiba token is “A Decentralized Meme Token that Evolved into a Vibrant Ecosystem” and got to the heart of its people because the dog breed’s popularity resonated with the crypto community.
Who created the Shiba Inu Coin?
In 2020, an anonymous person or group called Ryoshi created a token named after the animal to continue the series of dog meme cryptocurrencies. After gaining a lot in value in 2021, it officially became Dogecoin’s rival, leading Floki Inu, Akita Inu, and Dogelon Mars.
In the range of one year, from August 2020 — when the cryptocurrency was created — until October 2021, the SHIB coin raised from a low of $0.000000000056 to an all-time high of $0.00008616, rising an incredible 150 million percent.
Also, a crucial moment in the coin’s history was the generous donation of $1 billion in SHIB that Ethereum’s lead engineer and co-founder Vitalik Buterin granted to help fight the devastating spread of COVID-19 in India, making it the largest donation ever given in history.
How many Shiba Inu coins are there?
The first unique component of the Shiba Inu ecosystem is its total supply. An impressive one quadrillion (1+15 zeros) SHIB tokens were minted at inception in August 2020, the highest number of coins ever generated in crypto space.
Following its launch, 50% of Shiba Inu's supply was locked in the decentralized exchange Uniswap. Here, users perform automated transactions between cryptocurrency tokens on the Ethereum blockchain and earn and swap cryptos through smart contracts.
The system is also known as an automated market maker protocol (AMM) that incentivizes users to become liquidity providers in exchange for a share of transaction fees and free tokens.
SHIB’s Ryoshi transferred the other half of the token supply to Vitalik Buterin, apparently hoping he would lock them away forever. This decision sparked criticism in the crypto ecosystem: Why transfer an amount this large to someone this wealthy, and what would he do with it?
Buterin appeased the community when he devolved half of his holdings to the India Covid Relief Fund. However, he was still holding 45% of the total SHIB supply, raising doubts about the true decentralization of SHIB and its susceptibility to future volatility.
After receiving considerable objections, Ethereum’s co-founder completed a record-breaking burn of 410.24 trillion SHIB (approx. $6.6 billion), equal to 40% of the total supply, which was removed from circulation for good.
How many Shiba Inu coins are burned in total? About 41% of coins are burned, meaning they are no longer in circulation, including the large amount sent to Buterin, who then burned most of them, as mentioned before.
SHIB is not the only canine cryptocurrency sent to Ethereum’s co-founder. Dogelon (ELON), and Akita Inu (AKITA), to name a few, were also sent to Buterin’s crypto address in a move to gain some publicity due to the popularity of the prominent figure.
The decision to send 50% of the coins in circulation to Buterin was probably hazardous and not compliant with the blockchain standards of decentralization. However, in the words of the developers, in regards to the generous delivery to Vitalik, “there is no greatness without a vulnerable point, and as long as VB doesn’t rug us, then Shiba will grow and survive.”
Does the Shiba coin have a purpose?
Meme coins are famous for being driven by their community support more than anything else. This concept is what mainly drives their development and their price. While many do not see the utility in such a purpose, members of the community believe this is what actual decentralization should be and what will help cryptocurrencies grow.
The crucial concept is that no central authority controls the destiny of the coin. Instead, a community of supporters leads it to succeed, which many believe is an empowering notion.
The official Shiba token website mentions the project is an experiment in decentralized spontaneous community building to give power back to the average person. It resonates with the rise in popularity of meme stocks at the beginning of 2021 when GME (GameStop Corp) proved the power of decentralization to the world.
What is the Shiba coin used for?
Shiba Inu is divided into several tokens that support the operation of the entire cryptocurrency ecosystem:
The Shiba Inu tokenomics depends on the following three tokens:
- Shiba Inu (SHIB): This is the project's predominant currency, which had a total supply of 1 quadrillion tokens when it was launched. It can be exchanged with any of the ERC20 tokens of the Ethereum ecosystem.
- Leash (LEASH): As a second token in the Shiba Inu ecosystem, LEASH has a total supply of only 107,646 tokens and was initially a rebase token tied to the price of Dogecoin. A rebase token has a flexible monetary base in that its supply is set to increase or decrease to adjust the token price without affecting the value of anyone's share of coins. The rebase function was later switched off for good, and the token went back to its ERC20 design.
- Bone (BONE): Only available on ShibaSwap, and with a total supply of 250,000,000 tokens, BONE is intended to fit between the other two tokens in terms of circulation supply. It is a governance token that will allow the ShibArmy to vote on proposals in 2022. The more BONE users possess, the more weight their vote will carry in the decision process of future projects.
The Shiba Inu ecosystem also includes the following tools:
- ShibaSwap: The decentralized exchange (DEX) for decentralized finance (DeFi) is where users should find a secure place to trade cryptocurrencies without the limits of a centralized platform. We’ll dig deeper into this concept below.
- Shiba Inu Incubator: Previously known as the Artist Incubator, this is where the talented people of the ShibArmy can express their creativity and build their artworks.
- Shiboshis: Shiboshis are 10,000 non-fungible tokens (NFTs) generated on the Shiba Inu ecosystem and permanently recorded on the Ethereum blockchain, with different features that make each of them unique and collectible. They can be purchased and traded on the popular NFT platform OpenSea and ShibaSwap without fees.
What is ShibaSwap?
The enormous success of the Shiba experiment has pushed its developers to build another project, a decentralized exchange in line with other platforms like UniSwap and SushiSwap.
But why swap and not trade? What’s the difference?
The concept is similar. However, in 2017, it became clear that there was a need to “swap” tokens instead of trading them in the traditional sense. Moreover, a trader typically used Bitcoin (BTC) or Ether (ETH) to buy or sell altcoins through a regular exchange. With “atomic swaps,” an instantaneous swap of digital assets between different blockchains would occur without an intermediary.
Atomic swaps have now been replaced by wrapped tokens, where DeFi originates. Unlike centralized exchanges like Binance and Coinbase, DeFi platforms like Uniswap, SushiSwap and now ShibaSwap allow traders to swap tokens without order books, custodians or intermediary points of failure of any kind.
ShibaSwap’s release date was July 6, 2021, and brought a lot of excitement to the ShibArmy, which was expecting the platform's launch as a crucial moment in the life of the cryptocurrency.
The ShibaSwap exchange is an automated market maker (AMM) that works through smart contracts and allows traders to swap assets automatically without order books and excessive trading fees. It gets inspiration from the first and most popular platform, Uniswap. However, the main difference lies in the six-month lock rule for 67% of cryptocurrency invested in providing maximum liquidity. By locking their assets, investors get to earn some interest.
SHIB, LEASH, and BONE are traded on ShibaSwap in a unique way, considered the next evolution in DeFi platforms. ShibaSwap users can DIG (provide liquidity), BURY (stake) and SWAP any of the three Shiba Inu tokens (SHIB, LEASH, and BONE) to gain “WOOF” profits through a sophisticated and innovative passive income reward system.
Shiba Inu vs. Dogecoin
Shiba Inu is considered the Dogecoin Killer as its team believes its value will overtake the value of Dogecoin. Starting with what they have in common, we highlight that they both originate from the Shiba Inu dog breed, which has become a popular meme. They both have a significant community of loyal fans who support and determine their success.
Both cryptocurrencies rely primarily on the publicity that influencers provide through popular social media like Twitter and Facebook, where often their goals and developments are also announced.
Here are the main differences between the top two dog meme cryptocurrencies
The first meme coin to enter the market was Dogecoin, which eventually gained a supportive following. Shiba Inu appears to have been introduced with the hope of replicating Dogecoin's incredible popularity. These digital currencies have Japanese dogs as their logos, yet they differ significantly.
SHIB is an ERC-20 token, which runs on the Ethereum network, and may communicate with various DeFi projects that share the identical blockchain. However, DOGE is still recognized as a suitable payment method substitute for Bitcoin.
How to buy Shiba Inu
SHIB and LEASH can be purchased and sold through ShibaSwap, Uniswap and an increasing number of centralized exchanges (CEXs). On Sept. 16, 2021, the SHIB token was listed on Coinbase, which joined other popular centralized platforms like Binance, Huobi, and Kucoin in facilitating the trade of SHIB.
On the other hand, disappointingly for SHIB supporters, American financial services platform Robinhood has been reluctant to list the cryptocurrency because, in the words of its CEO, “SHIB is still not secure enough.” Robinhood’s U.S. rival Public.com listed the token in October 2021.
The Shiba Inu developing team is very secretive about the coin road map. Therefore, it’s rather difficult to anticipate what’s in the cards for the cryptocurrency in the near future. The developers might decide to burn other coins to make SHIB more deflationary than it is now and help with a price appreciation. We recently learned that Shiba is preparing to enter the Metaverse and will be burning some more SHIB soon, further reducing the total supply.