Hello Kitty ethos meets crypto puppy. Perky friendly brand voice, lots of cuteness, and a cringe level of dog-themed puns all add up to a $5.8 B market cap. What’s behind the Shiba Inu phenomenon and meme crypto? Let’s take a look.
Meme Cryptocurrency Background
To understand Shiba Inu brand and its coin SHIB, it’s helpful to first look at Dogecoin and meme crypto in general.
First of all, not all meme coins are coins. Some are tokens. This distinction seems to be blurring as even established crypto analytics companies often use the terms interchangeably.
Technically speaking, a coin is a digital asset that helps a blockchain fulfill its functions, like ETH does for Ethereum, BTC for the Bitcoin blockchain, or MATIC for the Polygon chain. Coins act like currency in many ways.
A meme crypto asset issued on a blockchain is a token. For example, when SHIB was first issued, it was a token on the Ethereum blockchain. DOGE has always had its own blockchain, so it's been a meme coin from the start.
Meme coins or tokens are like collectibles on crypto-steroids for people with high tolerance for risk. Memes are a controversial digital asset category because they don’t have any intrinsic utility. Their value depends on generating emotional attachment to the coin brand.
The appeal for issuers and early adopters is to make a lot of money by capitalizing on the network effect. Meme coins can be used for pump and dump and pyramid schemes. Twitter and Discord are the preferred marketing channels for meme crypto campaigns. Like NFTs, meme coins enjoyed a significant surge in 2021 as a bellwether for the frothy crypto markets that year.
The original meme coin is Dogecoin, launched in 2013 as a joke that later took on a life (and colossal market cap) of its own. Like many stories in the evolving crypto world, Hollywood could not have created a more rollercoaster plot and cast of characters for the Dogecoin story, complete with a villain and influential puppetmaster.
Dogecoin was the first meme to use the popular Shiba Inu Japanese dog breed as its mascot.
What is Shiba Inu?
Shiba Inu's creators launched in 2020 as a direct competitor to Dogecoin, claiming to be the “Dogecoin killer.” In contrast to Dogecoin, which has its own blockchain, SHIB launched as an ERC 20 token on the Ethereum blockchain.
SHIB's creators said their goal was to create a decentralized experiment in crypto community building. They also wanted to offer the Ethereum-enabled smart contract functionalities that Dogecoin's blockchain didn't have.
According to Shiba Inu's "woof" paper, the project has the following goals:
- To answer the question: "What would happen if a cryptocurrency project was 100% run by its community?"
- To start from zero in the spirit of creating something out of nothing.
- To launch without an existing community or preassembled team.
- To promote and increase Shiba Inu dog breed fandom.
Shiba Inu SHIB Performance
When Shiba Inu was launched, the founder Ryoshi locked 50% of the original 1 quadrillion in Uniswap and sent the rest to Ethereum co-founder Vitalik Buterin’s public wallet, reportedly without his prior knowledge.
In May 2021, Buterin donated $1B worth of SHIB to India for COVID-19 relief and then went on to burn 90% of the remaining coins, effectively taking them out of circulation.
While the India SHIB donation had a humanitarian impact, it also represented a major seeding of the SHIB coin into the Indian cryptocurrency market. In January 2023, Rajagopal Menon, Vice President at Indian crypto exchange WazirX, said, “Shiba Inu and Dogecoin are pretty close to the hearts of a lot of Indians, which is proven in our reserves.”
The coin's launch price was $0.000000000056, reaching a high of $0.00003791 on May 10, 2021.
Almost immediately, the price experienced a sharp decline with its value falling by more than 60%. Since then, SHIB’s price has continued to fluctuate.
Having said that, SHIB's market cap is still the second largest in meme crypto. As you can see, DOGE, in spite of Dogekiller SHIB nipping at its heels, is not dead yet.
Apparently, trademark laws aren't a thing in the meme-o-sphere as SHIB’s relative success sparked a wave of copycat brands, many with similar logos, such as SpookyShiba, BitShiba, Shibalana, King Shiba, SHIBAVAX, Captain Shibarrow, Shiba Fantom, and more.
The Shiba Inu Ecosystem
As mentioned above, Shiba Inu was originally an Ethereum-based ERC 20 token. To create a company with more traditional value markers, the SHIB team is working to develop the Shiba Inu ecosystem. In early March 2023, developers launched a beta test of the Shibarium Network, also known as - wait for it - Puppynet!
Puppynet is a Layer 2 blockchain allowing DAPPS development and token integration into fiat-based businesses.
Currently, the Shiba Inu ecosystem includes:
- Shiba Inu ($SHIB) the foundational currency.
- Leash ($LEASH) token, with a total supply of only 107,646.
- Bone ($BONE) token with 250,000,000 tokens. BONE is a governance token that allows members of the SHIBArmy to vote on upcoming proposals.
- Treat ($TREAT) token is a reward token launched in July 2022. It can be used to reward active members that are helping to build out the ecosystem. It will also be used in the SHIB metaverse and the Shiba Inu Collectible Card Game. Additionally, plans are that TREAT will also help provide balance to the Shi stablecoin.
- Shiba Una ($SHI) is an algorithmic stablecoin pegged to US$1.
- ShibaSwap: A decentralized DeFi platform; optimized for buying and selling SHIB and LEASH.
- SHIB.io metaverse property is under development. Shiba Inu hosted a space in early March at SXSW in Austin, featuring flyovers of the SHIB metaverse space.
- NFTS - Shiboshis are 10,000 unique and collectible Shiba Inu art NFTs with different traits. The NFT ecosystem includes a private club and an upcoming game that will integrate with the NFTs.
Like all meme coins, the future of the Shiba Inu coin is uncertain and largely depends on whether the brand successfully creates a compelling business with its ecosystem, coin and related digital assets.
As for the meme coin space, regulation is in limbo and new investors are still susceptible to hype. At the time of this writing, crypto headlines are buzzing with news of the $PEPE frog meme coin's recent surge. The more established crypto press is doing a good job dissecting the hype. This brief video commentary from Coindesk should be required viewing for anyone interested in meme coin speculation.
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The above is for general info purposes only and should not be interpreted as professional advice. Please seek independent legal, financial, tax or other advice specific to your particular situation.