Priced Way Under $1, SHIB Raises The Question: Is It Too Cheap To Ignore?
Over the last few years, meme coins have surged in popularity and taken center stage in the realm of cryptocurrencies. Dogecoin (DOGE) was the pioneer of meme cryptos, released as a joke in 2013. To the astonishment of the creators, Doge became quite popular soon after its release.
However, many of its users eventually lost interest in the project until it was reintroduced into the popular consciousness by Elon Musk and users on a cryptocurrency forum on Reddit called SatoshiStreetBets.
Shiba Inu (SHIB) was launched in August 2020 with the mission of overtaking Dogecoin and was promptly dubbed the “Doge Killer.” On October 27th, Shiba Inu flipped Dogecoin’s market cap to become the alpha pup. However, since then Dogecoin has reclaimed the spot as the most valuable meme coin.
The Shiba Inu team launched a decentralized exchange (DEX) called ShibaSwap, where users can stake their Shiba tokens to earn interest. More recently, the team has announced its plans to enter the layer-2 space with its network focused on scalability.
At the time of writing, SHIB is priced at $0.00002645, a very affordable entry price, making investors wonder if Shiba Inu (SHIB) is too cheap to ignore?
Shiba Inu: The Fundamentals
Shiba Inu was founded by an anonymous person with the pseudonym Ryoshi. It is an ERC-20 token on the Ethereum network, allowing developers to build the ShibaSwap DEX and integrate other tokens and NFTs into the platform’s ecosystem. The maximum supply of Shiba is 1 quadrillion tokens, which is much higher than most cryptocurrencies. The enormous token size caused SHIB to be much lower than most assets with similar market capitalizations.
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.
The Shiba Inu ecosystem consists of three tokens: Shiba Inu (SHIB), Leash (LEASH), and Bone (BONE). 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 fits in between the other two coins in terms of circulation supply, with a total supply of 250,000,000 tokens. It is a governance token that allows the SHIBArmy to vote on upcoming proposals.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Shiba Inu: The Upside
Shiba Inu is built on top of Ethereum, which means it can take advantage of smart contracts to create much more advanced applications, like DEXs and NFTs. The token released their ShibaSwap DEX back over the summer, and they have recently released “Shiboshis,” a collection of 10,000 NFTs. Dogecoin’s code is based on Bitcoin’s and lacks compatibility with smart contracts. Due to this, Doge can only be used as an internet currency and an (unstable) store of value.
ShibaSwap DEX also adds new ways to use Shiba tokens, providing more value to its users. It was launched to incentivize new users to buy Shiba tokens and stake them in liquidity pools, helping the adoption of the DEX.
In keeping with the dog theme, the Shiba Inu whitepaper paper uses canine terms to describe how returns can be generated from 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 distributed to token pools known as "Puppy Pools," according to the paper.
For cryptocurrency enthusiasts, part of the allure of meme coins is that they reject conventional protocols. 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.
Check Out: Shiba Inu (SHIB) Price Prediction
Shiba Inu: The Flipside
Shiba Inu is not a safe investment by any traditional standards. While massive gains are possible if ShibaSwap rises in popularity, Shiba does not add anything novel to the decentralized finance (DeFi) ecosystem. It can still have more use cases than Dogecoin because it is on the Ethereum network, but that does not mean it will perform any better.
There are also some security risks in depositing cryptocurrencies into anonymous projects like ShibaSwap because the code may allow the developers to scam investors out of their cryptos. Scams that cost users millions of dollars are becoming more common in the DeFi space. Experienced code auditors can rule this possibility out if they can access the code, but ShibaSwap hasn’t been audited yet.
The Verdict
Shiba Inu can be extremely volatile, and SHIB's recent gains may make it quite vulnerable. Shiba Inu also has very limited utility, and its value is based mainly on a social-media-fueled speculative frenzy.
SHIB is by no means a sure or safe investment by conventional standards. However, it proved that it could surprise investors with astonishing returns with its 2,500% run last May. Investing in Shiba is extremely risky, but with enough luck and liquidity, it could skyrocket again.
Open an account with eToro, deposit some funds with USD, and finally – buy Shiba Inu from just $10.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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