Shiba Inu Definition

What Is Shiba Inu?

Shiba Inu (SHIBUSD) is an Ethereum-based altcoin (a cryptocurrency other than Bitcoin) that features the Shiba Inu—a Japanese breed of hunting dog—as its mascot. Shiba Inu is widely considered to be an alternative to Dogecoin; in fact, proponents of Shiba Inu tout it as the “Dogecoin killer.”

Shiba Inu and Dogecoin are meme coins, which are cryptocurrencies that are associated with some theme—like the Shiba Inu dog in the case of Shiba Inu and Dogecoin—but are often launched as a parody or inside joke rather than as a digital product that actually has some utility. While Dogecoin was launched in December 2013, Shiba Inu was created in August 2020 by an anonymous individual or group called “Ryoshi.”

Shiba Inu’s price soared more than ten-fold in October 2021, giving it a market capitalization of $35 billion (as of October 31, 2021) and ranking it 10th among all cryptocurrencies by this measure. A tweet from Tesla founder Elon Musk on October 4, 2021, featuring a picture of his new Shiba Inu puppy Floki, provided the initial impetus for the meme coin’s price surge. As Musk is one of the most high-profile supporters of Dogecoin and self-proclaimed “Dogefather,” his “cryptic” tweets often result in heightened volatility in the cryptocurrency space.

Shiba Inu’s price surge in October 2021 resulted in it almost catching up to Dogecoin’s $36.9 billion market capitalization (as of Oct. 31, 2021), after briefly surpassing it at one point. It remains to be seen whether Shiba Inu will indeed become the “Dogecoin killer” that its growing community of supporters—known as the ShibArmy—expects. But at least in October 2021, the stunning price gains of this previously obscure altcoin made Shiba Inu the tail that wagged the Dog(ecoin).

Understanding Shiba Inu

The guiding tenets of the Shiba Inu ecosystem are spelt out in a “Woof Paper” (presumably a play on “white paper”), available at the ShibaToken.com website.

According to the paper, Shiba Inu was developed as the answer to a simple question: “What would happen if a cryptocurrency project was 100% run by its community?” Its founder Ryoshi attributes its origins to an “experiment in decentralized spontaneous community building.” According to Ryoshi, the power of collective decentralization can build something stronger than a centralized team ever could create.

The ShibArmy’s base of over 500,000 members embrace its founding principles, which are:

• The project started from zero, with zero, in the spirit of creating something out of nothing;
• It was not founded from an existing community or preassembled team; and
• A professed love of Shiba Inu dogs.

As Shiba Inu is an Ethereum-based ERC-20 token, it is created on and hosted by the Ethereum blockchain, instead of its own blockchain. Ryoshi states in the paper that he chose to build the Shiba Inu ecosystem on Ethereum because it was already secure and well-established, and it allowed the project to stay decentralized.

The Shiba Inu Ecosystem

The Shiba Inu ecosystem consists of the following three tokens:

• Shiba Inu (SHIB): This is the project’s foundational currency. Starting with a supply of 1 quadrillion (equal to 1,000 trillion), Ryoshi locked 50% in Uniswap (for liquidity purposes) and then sent the other 50% to Ethereum co-founder Vitalik Buterin for safekeeping. In May 2021, Buterin donated more than 50 trillion Shiba Inu coins, then worth over $1 billion, to a COVID-19 relief fund in India, when the nation was reeling from the delta variant of the coronavirus. Shortly thereafter, Buterin also “burned”—or permanently removed from circulation—40% of Shiba Inu’s total supply to a so-called dead wallet.
• Leash (LEASH): The second token in the Shiba Inu ecosystem, Leash represents the other end of the ecosystem’s spectrum, with a total supply of only 107,646 tokens compared with the trillions of Shiba Inu tokens.
• Bone (BONE): Bone fits in between the other two tokens in terms of circulation supply, with a total supply of 250,000,000 tokens. It is designed to be a governance token that will allow the ShibArmy to vote on upcoming proposals.

The Shiba Inu Ecosystem also includes:

• ShibaSwap: The goal of DeFi platform ShibaSwap is to provide a safe place to trade cryptocurrencies while remaining decentralized. SHIB and LEASH are best purchased and sold through ShibaSwap.
• Shiba Inu Incubator: The incubator aims to shift the focus beyond popular artforms such as painting, photography and digital rendering, and discover ways to honor creativity and ingenuity.
• Shiboshis: Shiboshis are 10,000 Shiba Inu-generated Non Fungible Tokens (NFTs) written on the Ethereum blockchain, with different traits that make each Shiboshi unique and collectible.

Canine Terms

In keeping with the dog theme, the aforementioned Shiba Inu “Woof Paper” uses canine terms to describe how returns can be generated from one’s Shiba Inu tokens. On ShibaSwap, these tokens can be used to “Dig” (provide liquidity), “Bury” (stake tokens), and even “Fetch” (exchange one token for another). Tokens used in these strategies generate “Woof” returns in the form of Bone tokens that are distributed to token pools known as “Puppy Pools,” according to the Woof Paper.

For cryptocurrency enthusiasts, part of the allure of meme coins is that they reject conventional protocols, and this unconventional approach may extend to the use of canine terms to describe return strategies. But they certainly seem to be a world away from staid investment terms such as return on investment and liquidity.

How to buy Shiba Inu

The Quick Start Guide at ShibaToken.com details the following steps for a prospective buyer of SHIB or LEASH tokens:

1. Create a MetaMask wallet.
2. Send Ethereum (ETG) to your wallet, by buying directly or transferring from exchanges like Coinbase, using the ERC-20 network when transferring Ethereum.
3. Connect your MetaMask wallet to ShibaSwap.
4. Swap ETH for SHIB, LEASH, or BONE tokens.

Shiba Inu Investing Considerations

Investing in cryptocurrencies is risky enough because of their massive volatility and lack of regulation. Investing in the altcoin/meme coin space presents an additional challenge because of a lack of differentiation and the fact that most of their value is based on frenetic trading by their fanatical followers. Here are some investing considerations for a potential investor in Shiba Inu.

Low price: Even after its recent gains, Shiba Inu (SHIB) costs a fraction of a cent, so one can buy millions of SHIB tokens with a few hundred dollars. At its recent price of $0.00006485 (as of October 31, 2021), $100 will fetch you over 1.5 million SHIB tokens.

Limited utility and use case: While its adherents may point out that Shiba Inu-based NFTs are now available and its Ethereum base might enable smart-contracting capabilities in the future, Shiba Inu presently has very limited utility and does not have a compelling use case yet.

Skyrocketing price: Shiba Inu’s market capitalization of $35 billion makes it larger than many S&P 500 companies that have been in existence for decades and that have grown sales and profits for most of that time. In fact, the combined $79 billion value of Shiba Inu and Dogecoin (as of Oct. 28, 2021) exceeded the market capitalization of 388 companies on the S&P 500. On Aug. 1, 2020, SHIB was trading at $0.00000000051, so at its current price of $0.00006485 (as of Oct. 31, 2021), it has gained an astronomical 12,715,586%! This means that $1 invested in SHIB on Aug. 1, 2020, would have been worth a cool $127,156 on Oct. 31, 2021.

That eye-popping return also means that Shiba Inu has achieved its founder Ryoshi’s objective of creating something from nothing in spades. However, those gains may likely have been driven by social-media fueled speculative frenzy as cryptocurrency enthusiasts look for the next big thing. If the bubble bursts, retail investors who got in at the highs may be left holding the bag.