Shiba Inu: Much More than a Dogecoin Killer
October 19, 2021
Shiba Inu is a meme coin that proves the power of memes. Its creator, Ryoshi, is a pseudonym and introduces the Shiba project to us as an experiment in decentralisation, with the intention of demonstrating that a cryptocurrency can be born and grow from any online community, starting with 0 budget.
The launch of SHIB
Shiba Inu (SHIB) is a cryptocurrency and DeFi protocol based on Ethereum. Born in August 2020, it gained popularity thanks to the viral effect of the meme, helped by tweets from Elon Musk and the particularly positive momentum for Bitcoin, Dogecoin and NFTs.
The community that has since emerged, the ‘Shibarmy’, is presented with a Woofpaper instead of a Whitepaper, filled with ‘dog slang’ mixed with quotes from a Japanese philosopher, Miyamoto Musashi.
Shiba’s tokenomics is very particular. One quadrillion SHIBs were created and distributed like this:
- half was sent to Vitalik Buterin’s wallet
- half were placed in the UniSwap ETH-SHIB pool
But why to Vitalik?
This supply of SHIBs was given by the devs to the founder of Ethereum trusting that he would not sell them and, according to the Woofpaper, “There is no greatness without a vulnerable point”.
However, when SHIB began to take off, shortly after launch, Vitalik donated $1 billion in SHIBs to the Indian Covid Relief Fund.
After that, Vitalik ‘burned‘ another $410 trillion of SHIB and declared that he would donate the remaining 10 per cent of his original portion, as he did not want to have such a responsibility for the token. These two actions did not hurt Shiba Inu, in fact, the first improved the reputation of the cryptocurrency and the second kept it scarce.
Remember, also, that the other half of the total supply remained available for purchase on UniSwap.
A multi-token ecosystem
The Shiba Inu project is not limited to the SHIB token, but uses the ERC-20 standard to create several utility tokens.
Doge Killer (LEASH), as its name suggests, was created to hedge Dogecoin. LEASH was initially pegged to the price of DOGE through a mechanism similar to that of algorithmic stablecoins, whereby it maintained the peg by manipulating its supply (rebase).
“Unleashed” from the DOGE price peg, LEASH remains fairly stable, however, having a very low supply of 107,647 units, and being used only within the Shiba Inu ecosystem.
Bone ShibaSwap (BONE) is the governance token. It is used to participate in proposals and votes on changes to the protocol. It has a maximum supply of 250 million.
ShibaSwap: How it works
It stands for Decentralised Exchange and is a cryptocurrency exchange platform that is not controlled by any intermediary or company, but is completely reliant on smart contracts and algorithms. DEXs also often require more technical skills and in-depth knowledge of cryptocurrencies. They do not support fiat currencies and do not allow withdrawal and deposit via traditional payment systems.
By transferring your tokens from UniSwap or SushiSwap, or providing it directly to ShibaSwap, you were rewarded with a very high percentage of BONE tokens, which gradually decreased over the course of two weeks.
ShibaSwap, apart from swapping tokens like any DEX, currently offers mainly staking and liquidity provision functionalities.
The difference between the two is that staking is done by blocking single coins, specifically those native to the protocol, while liquidity provision is done by blocking two tokens (pairs) at a time in the pools that power the exchange.
For each feature of ShibaSwap, there is of course a term that evokes the behaviour of these cuddly dogs.
- Dig: provide liquidity to liquidity pools, to receive ShibaSwap liquidity pool tokens (SSLP) in return.
- Woof: redeem liquidity pool rewards by converting SSLP into BONE.
- Bury: Staking SHIB, LEASH and BONE to receive rewards in xSHIB, xLEASH and xBONE. These representative tokens can be redeemed in their underlying once you remove them from staking.
- Bonefolio: A dashboard where you can view all reward rates, analyse platform data and keep an eye on the performance of your tokens and yields.
- NFT: A section dedicated to buying and selling 10,000 Shiba Inu-themed NFTs called Shiboshi.
Shiba Inu’s Roadmap
In August 2020 Ryoshi published the first Roadmap for the development of the Shiba Inu ecosystem.
After the launch of ShibaSwap, we can expect to see a completion of its DeFi environment.
- Doggy DAO
As a growing community cannot build a DeFi project without a governance structure, the developers envisaged the creation of a DAO, a decentralised organisation governed exclusively by smart contracts. This will allow the full potential of the BONE token to be utilised and give the entire community a voice in the most scalable and democratic way.
Currently the wallets dedicated to project development and emergency moves are multisigs, i.e. wallets that can only be used with the signature of a minimum number of custodians. All keepers are trusted, and their tags and addresses are written in the Woofpaper.
- Layer 2: Shibarium
This step involves building a Layer 2 blockchain on Ethereum in order to make the ShibaSwap and Shiba Inu protocol in general more scalable and autonomous.
- SHI stablecoin
More tokens in sight! One will be TREAT, still shrouded in mystery, and the other will be SHI. This will be an algorithmic stablecoin designed to provide traders with a store of value to facilitate trading and the use of DeFi functionality across the Ethereum ecosystem.
The peg model is not yet defined, but in general, it will be based on smart contracts without the need for reserves.
- Shibarium Financial Ecosystem
This phase will cover the integration of Shibarium with Ethereum’s Defi protocols, possibly introducing SHI and SHIB into the liquidity pools of other DEX or decentralised lending protocols. Building bridges and other interoperability technologies will be required.
The Shiba Inu spirit
Even as it grows, the project does not leave behind its love for four-legged creatures, and, through Amazon Smile, allows people to channel part of their online shopping to the Shiba Inu Rescue Association (SIRA).
Another side project is the Shiba Incubator, dedicated to fostering talent within the community, continuing to uphold the principle that greatness can come from nothing, simply by helping each other.