What is Shiba Inu (SHIB)?

What is Shiba Inu (SHIB)?

Shiba Inu, also known as SHIB, is an Ethereum-based ERC-20 token released on the Ethereum network and is the primary token of the Shiba Inu ecosystem. SHIB was created in August 2020 by an individual under the pseudonym Ryoshi.

Ryoshi has described Shiba Inu as “an experiment in decentralised spontaneous community building.” Its mission is to become the number one doggy-themed token on the market.

SHIB at the time of writing is currently sitting behind Dogecoin by market capitalisation, leading to its nickname as the “Dogecoin Killer.”

What is an ERC-20 token, and why pick Ethereum over their own network?

First, an ERC-20 token is a blueprint for tokens created on the Ethereum network. Following this blueprint, it ensures that all tokens on the Ethereum network will be interoperable with their network’s smart contracts and existing apps.

The benefit here is they do not need to be minted, as there is no mining on the Ethereum network. This means all one quadrillion tokens were available immediately to purchase, trade, or hold.

Second, according to Ryoshi, the reason for picking Ethereum was because Ethereum was secure, already well-established, and allowed for the project to stay fully decentralised, unlike other layer-1 blockchains on the market, which run a centralised form of decentralisation.

Those who hold Shiba Inu tokens are known as members of the SHIBArmy, and presently, over 500’000 members belong to this community.

The Shiba Inu network consists of three different crypto tokens. The most famous is the SHIB token, which is what most people think of when discussing Shiba Inu but also consists of the BONE and LEASH tokens. Together they form the foundations of the Shiba Inu network.

Founder Ryoshi believes that:

“through the power of collective decentralisation we can build something stronger than a centralised team ever could create.”

How do SHIB tokens work, and how do they relate to the ecosystem?

The SHIB token, the project’s foundational cryptocurrency, is used primarily as a medium of exchange on the Ethereum network. SHIB can also be used to pay fees within the Shiba Inu ecosystem or “buried” on the Shiba Inu network for staking rewards.

In the beginning, Ryoshi locked up 50% of all SHIB tokens to the UniSwap exchange before donating the other 50% to Ethereum founder Vitalik Buterin. Supposedly for safekeeping, but also likely for the exposure it brought from saying Buterin was the largest holder of SHIB.

However, what really brought the project to the mainstream was when Buterin donated more than $1 billion worth of SHIB, or about 10% of all SHIB tokens, to the Indian Covid-19 Relief Fund in May 2021.

Buterin then burned his remaining tokens, roughly 40% of all the SHIB tokens ever created.

Buterin may have initially donated and then burned these unsolicited doggy-based tokens, many of which congested the Ethereum network during the 2021 peak, as their creation contributed to record-high ETH transaction fees.

Yet, Buterin’s actions only led to increased interest in the project overall. While all other Dogecoin clones failed, Shiba Inu thrived, gaining over 150,000,000 % in value from November 2020 to October 2021.

SHIB is the primary token of the Shiba Inu ecosystem and the gateway to all other products under the Shiba Inu banner. But what about the other tokens on the Shiba Inu network?

BONE and LEASH tokens

There are two additional tokens in the Shiba Inu ecosystem, BONE, and LEASH. The BONE and LEASH tokens can only be accessed through staking on the Shiba Inu network but have different use cases.

BONE tokens

The BONE token acts as the governance token for the Shiba Inu network and has a limited supply of 250 million.

Like most governance tokens, the more you hold and the longer you’ve had them, the more weight your vote will hold when voting on matters relating to the development of the Shiba Inu ecosystem.

To get BONE tokens, you must be willing to stake your SHIB tokens to the Shiba Inu network for a pre-defined period.

When staking your SHIB tokens, you are rewarded with xSHIB, which is a share of the liquidity pool you have just joined. xSHIB also pools a percentage of any swap fees and generates BONE which is then distributed to these xSHIB holders.

BONE itself can be staked for tBONE, which generates a percentage of swap fees and converts this into BONE which is then distributed back to tBONE holders.

LEASH tokens

Lastly, the rarest of the Shiba Inu ecosystem is LEASH, with a much more limited supply of only 107’647 tokens.

Originally planned to be a rebase token within the ecosystem, the developers eventually terminated this idea and decided to keep this token as a simple ERC-20 token.

When LEASH is staked, you will receive xLEASH and a percentage of the swap fees, which are converted into LEASH and then rewarded back to xLEASH holders.

In summary, Shiba Inu’s SHIB token is this ecosystem’s central token and allows access to these additional tokens. In addition, the BONE token is used for network governance, and the LEASH token encourages liquidity on their network.

So, what can you do with SHIB tokens aside from staking them?

In recent months, the SHIB token has been accepted as a payment method on a Latin American food delivery platform, Rappi.

Likewise, donations to certain charities, such as The American Cancer Society, can be achieved using SHIB, keeping to the spirit of what made Shiba Inu famous initially.

Additionally, a partnership with Shopping.io has now made it possible to use SHIB tokens for purchases on Amazon, eBay, and Walmart.

All of this suggests that Shiba Inu is presently showing no signs of stopping or slowing down its expansion.

The future of Shiba Inu

Finally, what about the future? How does Shiba Inu plan to stay relevant moving forward?

As per recent announcements, we are likely to see Shiba Inu stick around the NFT space, thanks to its Shiba Inu Incubator and Shiboshis NFT collection, as well as enter into the metaverse with the Shibaverse.

However, perhaps most excitingly, is the rumour of a transition to a layer-2 scaling solution. While these are just rumours for now, if developed, they could bring a long-term utility to the platform other than just an appreciation for the breed of small Japanese hunting dogs.

In conclusion, while Shiba Inu may have started as a simple memecoin, it has transitioned into a blossoming network that is only likely to continue getting larger throughout the years.

Perhaps most telling is how Shiba Inu has shown it’s staying near the top even as we enter the next bear market.

Elbaite is the Australian cryptocurrency exchange that allows you to buy & sell crypto directly from your crypto wallet. Make an account today to start your crypto investment journey!

Disclaimer: The information on this website is purely for information. Elbaite is not a financial adviser, and nothing stated here is to be taken as financial advice. You should seek independent legal, financial, taxation or other advice relevant to your financial situation before making any investment decisions.

More articles you may also be interested in:

Share this:

Related posts

Crypto Taxes Australia

In this comprehensive guide, we will explore the basics of cryptocurrency taxation in Australia, breaking down the rules and regulations set by the Australian Taxation Office (ATO). We will also…

A Guide to Buying Bitcoin: Step-by-Step Process for Acquiring BTC

Buying Bitcoin is often seen as a long and complicated procedure. In 2023 this couldn’t be further from the truth. Buying Bitcoin today is more often than not a one-click…

What is a self-custodial wallet?

Most people have a physical wallet that holds cash and cards, you may also use an electronic wallet such as an Apple, Google, or Paypal wallet. When it comes to…