Why Shiba Inu Is A Better Buy Than Dogecoin

Dogecoin is one of the most popular meme coins around but its competitor Shiba Inu looks like a better buy.

Last Updated January 27th 2022

5 Min Read

Key points

Shiba Inu is deflationary, making its tokenomics superior to Dogecoin.
Shiba Inu has multiple use cases.
SHIB staking is an excellent opportunity for passive income.

The period between 2020 and early 2021 was crazy for crypto. Not only did Bitcoin test price levels that not many would have imagined possible, but meme coins also ruled supreme.

Two meme coins that dominated the May Bull Run are Shiba Inu (SHIB) and Dogecoin (DOGE). Anyone who put $100 in Dogecoin in early 2020 made $12,000 by April 2021. Similarly, anyone who put $100 in Shiba Inu made over $1.6 million by April. Both have since experienced a huge correction, but these were phenomenal gains nonetheless.

With the hype around meme coins dying down, their next phase of growth will primarily be organic. However, while both have good prospects for growth, Shiba Inu is a better buy than Dogecoin. Here’s why.

1. Shiba Inu Has Better Tokenomics

Both Shiba Inu and Dogecoin rallied by unimaginable percentages in the May Bull Run. However, that was an outlier situation. The rally was not driven by any organic factors but rather by Elon Musk’s tweets.

Musk’s tweets created FOMO around Dogecoin, and then Shiba Inu came up, right in the middle of Dogecoin’s hype cycle. The result was a Shiba Inu pump that gave investors over 500,000% gains.

However, now that the hype is gone, one of the key factors to consider when comparing the two is tokenomics. On this front, Shiba Inu wins, hands down.

Shiba Inu has a fixed supply of 1 quadrillion tokens. While this is quite huge, a significant portion of the supply was burned, while 50% of the total supply was donated to Vitalik Buterin.

Buterin donated $1 billion worth of these tokens to India and burned the rest to a dead wallet. This means the total amount of Shiba Inu is less than 50% of the total tokens that were created initially.

At the same time, Shiba Inu has a coin burn feature as part of its core working mechanism. When a person buys Shiba Inu, a portion of the fees they pay are burned. Essentially this means the total supply of Shiba Inu will decline over time, as more people use it.

Going by the economics law of demand and supply, it then follows that as the demand for Shiba Inu goes up, so will the token price. This gives it the leverage to grow organically over time, regardless of whether some random factors cause it to go parabolic or not.

This is not the case with Dogecoin. While its circulating supply is much lower than that of Shiba Inu, its tokenomics are not the best out there.

Dogecoin is inflationary, and 5 billion new Dogecoins enter circulation every year. This means outside of random pump factors like the Elon Musk tweets; there is little chance of Dogecoin making any real value gains organically.

The only way it can grow organically is if its transactional demand is so high that it can absorb all the new coins created at any given time. While no one can predict whether this will happen or not, the odds of such a scenario are low.

That’s because Dogecoin’s core use case is as a transactional currency. In essence, for its demand to outpace supply, many people need to be using it for payments. However, it is not the best cryptocurrency for this role. Cryptocurrencies like Litecoin and Bitcoin Cash have better tokenomics and serve the role of payment cryptos much better.

In essence, for someone aiming for long-term value appreciation without basing projections on hype, Shiba Inu is a better buy.

If Bitcoin’s price action over the last 10-years is anything to go by, then coin/token supply is an important consideration when investing in crypto.

Read Also: Why Do Shiba Inu Coins Have Value?

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

2. Shiba Inu Has A More Diversified Use Case

Shiba Inu is an ERC-20 token which means it can leverage the power of the Ethereum network for DeFi applications.

The project is already making huge strides on this front, and last year, launched Shibaswap. This is a decentralized exchange where investors can exchange SHIB for other tokens. Investors can also stake their Shiba Inu and make a passive income off it.

This is a big deal because it will serve to draw investors to Shiba Inu long term. This coupled with the crypto’s deflationary nature could see it grow exponentially over time.

Dogecoin does not have the same advantages. It is by design a Bitcoin copy, albeit inflationary. In essence, for it to gain any organic transaction, it would have to be the very best in payments.

Since crypto is a very competitive market, and no one can tell for sure which cryptos will emerge winners in the future, it is best to bet on one with a versatile use case. In this context, that means Shiba Inu.

3. Shiba Inu Has Passive Income Potential

Passive income through staking is increasingly becoming one of the key drivers to crypto investments. Quite expected due to the nature of the market. Crypto volatility outpaces that of traditional markets by a huge margin. For instance, a 20% drop in value in the equity markets is considered a recession, but in crypto, it is a pretty regular occurrence.

Staking rewards grow an investor’s crypto holdings over time and help maintain an investor’s value, regardless of the volatility.

Dogecoin does not have this advantage. When one invests in Dogecoin, the only way to make money out of it is through speculation. In essence, while a value drop can affect both cryptos equally, a Dogecoin investor is likely to feel the pinch more in times of heavy market corrections.

All these factors make Shiba Inu a better buy than Dogecoin, even though both are worthy investments.