The SHIB cryptocurrency was named after the Shiba Inu dog breed which hales from Japan, and its icon is that of the breed. The breed is perhaps most famous thanks to the “doge” meme, which was also the inspiration for another popular memecoin, Dogecoin. If you’re unfamiliar, a memecoin is a cryptocurrency inspired by internet memes, or general internet jokes.
While Dogecoin is an independent cryptocurrency on its own blockchain, the Shiba Inu coin (SHIB) is an ERC20 token hosted on the Ethereum blockchain. Therefore, Shiba Inu is sometimes referred to as the “Dogecoin for Ethereum.”
Shiba Inu’s popularity has spurred a devoted following of fans and token holders, dubbed the “Shib Army.” Passionate owners of SHIB are spread across social media platforms including Reddit, Twitter, Telegram, and Discord, boasting some of the most active communities and highest number of account follows in the crypto ecosystem.
When Shiba Inu was launched by its mysterious creator, it had no functionality other than as a medium of exchange. However, the community has built around SHIB to include two further ERC20 tokens with different uses in its own decentralized exchange (ShibaSwap), non-fungible tokens (NFTs, called Shiboshis), and even a layer 2 protocol for Ethereum (Shibarium).
How was Shiba Inu developed?
Shiba Inu was created by a pseudonymous developer known as Ryoshi in August 2020. Ryoshi means “fisherman” in Japanese, and the mystery shrouding Ryoshi echoes that of other crypto developers like Satoshi Nakamoto of Bitcoin.
Ryoshi stated on their blog, “I am not important and one day I will be gone without notice.” This mentality aligned with the purported decentralized community focus of the project, which has further driven its development. True to their word, Ryoshi deleted all of their tweets and blog posts without explanation in May 2022. Following Ryoshi’s departure, many consider Shytoshi Kusama, the lead developer of ShibaSwap, the de facto face of Shiba Inu.
Since the release of Shiba Inu’s “woofpaper” (its version of a whitepaper) in April of 2021, the ecosystem has rapidly expanded. In July 2021, the launch of ShibaSwap provided the first dedicated DeFi outlet for holders of SHIB.
As with all memecoins, SHIB has seen plenty of volatility in its price, sometimes without clear inciting events. However, its strong community and active development have kept interest in the project going.
How does Shiba Inu work?
Shiba Inu was initially released without any use cases, but the community quickly rallied around the token and built multiple blockchain-powered applications around it. From decentralized finance (DeFi) to NFTs to layer 2 protocols, developers of Shiba Inu’s ecosystem have aimed to bring a broad utility to the memecoin.
ShibaSwap
Built as the first decentralized application (dapp) for SHIB, ShibaSwap is a hub of DeFi activity. First and foremost, it is a decentralized exchange that allows for the swapping of ERC20 tokens, in most cases paired in liquidity pools with SHIB. It also allows for staking (BURYing), providing liquidity (DIGging), interacting with Shiba-hosted NFTs, and voting on governance proposals.
The other two tokens in the ecosystem are LEASH and BONE, which have active roles in the DeFi operations that center around Shiba Inu.
- LEASH was originally designed to track the price of DogeCoin’s DOGE. However, this function was turned off, and LEASH’s price is now completely independent. It can be staked or used in liquidity pools in ShibaSwap, and there is a total supply of only 107,646 LEASH tokens.
- BONE is the governance token of the Shiba Inu ecosystem, and it can be staked to vote on proposals or used in liquidity pools.
NFTs
Developers of Shiba Inu released 10,000 pixelated dog NFTs called Shiboshis in October 2021, selling out in just 35 minutes. Each Shiboshi has different traits including accessories, clothes, fur, and headwear—all of which define its rarity and features in a planned blockchain-based game.
Shibarium
With the growth in the use of Ethereum layer 2 solutions (L2s) like Arbitrum and Optimism, the Shib Army decided to develop its own L2 focused around its ecosystem tokens.
Named Shibarium, Shiba Inu’s L2 will use BONE to pay for gas on the network and improve on Ethereum’s scalability and speed.
Its first iteration began to run in early 2022, and the developers planned for a public beta launch later in the year. Reportedly, Shibarium’s functionality will be focused on peer-to-peer transactions and interactions with ShibaSwap, at least in its initial stages. This will reduce gas fees related to DeFi participation, ultimately aiming to increase adoption of the platform.
How is the SHIB token used?
SHIB is an ERC20 token on the Ethereum blockchain and is used for transactions between users, interactions with Ethereum-based DeFi protocols, and more. Through its first year, SHIB’s primary use was in ShibaSwap, where holders could swap it for other tokens, stake it (BURY), or provide liquidity (DIG).
Users who BURY SHIB receive a staked version of the token, called xSHIB. The same is true of those who stake LEASH (who receive xLEASH) and BONE (who receive tBONE). Holders of these staked tokens can collect rewards from the protocol in various ways, including from swap fees.
Shib Token supply
Upon its release, 1 quadrillion SHIB were created. Half of the supply was deposited into a liquidity pool in Uniswap, allowing anyone to exchange for SHIB from the outset. There was no airdrop, no initial coin offering, and no early access to the tokens.
The other half of the supply was sent to a wallet owned by Ethereum creator Vitalik Buterin. Ryoshi referred to Buterin as “the Woofmeister” in a blog post, saying: “As long as he doesn’t rug us, then SHIBA will grow and survive.” In this instance, “rug” means pulling the plug on the project and thus rendering the token useless.
This was good publicity for the token, but even better for supply-side tokenomics. Buterin ended up donating about 50 trillion SHIB (10% of his holdings, worth around $1.2 billion at the time) to the India COVID Relief Fund and burned (destroyed) the rest by sending it to a dead blockchain address, thus removing it from circulation. This amounted to a burn of about 40% of the entire supply of SHIB.
Buterin’s decision had the unintended effect of popularizing the SHIB burning. Intending to further reduce the supply and drive more value into the token, there have been growing community efforts to burn the token through games, burn portals (which offer rewards), and in other creative ways.
Conclusion
- Shiba Inu is a dog-themed cryptocurrency based on the Ethereum blockchain whose popularity rose during the 2021 crypto bull market.
- Half of all SHIB tokens were originally released to a Uniswap liquidity pool and the other half to Ethereum creator Vitalik Buterin, who later burned 40% of the total supply.
- Although the token had limited functionality upon launch, its development has been entirely community-driven and now includes DeFi protocol ShibaSwap and NFTs, with other projects in development.
How to buy Shiba Inu (SHIB)
You can buy Shiba Inu on Bitstamp. Sign up for a Bitstamp account and start trading SHIB today!
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