Shiba Inu started out as a joke coin created for the community but has quickly turned into a multi-billion dollar project that would probably fall under the speculative category.
However, this website is focused on providing facts and ideas without biases or rumors. As much as possible we will keep our opinions out of this blog post and let you decide based on as much true factual and whole information that we can fit in this article.
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In this post, we are going to explain what the Shiba Inu token is, why it’s been growing at an incredible pace and what it will take to reach the price of one penny.
What is Shiba Inu?
First off let’s make sure you understand the difference between a coin and a token I’m going to assume that you already know what a blockchain is and you should know that there are many different blockchains out there Ethereum is one, Binance smart chain is another, polygon has a blockchain, even dogecoin has its own blockchain.
Now, each blockchain has its own coin and that’s where we get the Ethereum coin, the BnB coin and the Mata coin, and so on.
However, on some of these blockchains, you can create tokens that are not coins because they don’t help run the blockchain but they act as a coin.
They’re called a token. They utilize the power the security and the upkeep of the main blockchain so that they don’t have to focus on their own blockchain. And like I said earlier they act just like the main coin except they aren’t.
Shiba Inu is a token on the Ethereum network meaning it’s not on its own blockchain. It runs on Ethereum.
This means there’s no such thing as a Shiba Inu coin. It’s technically a Shiba Inu token. I’ve seen a lot of confusion about that from newcomers and wanted to clear it up.
Shib is a token on the Ethereum network. Meanwhile, dogecoin is an actual blockchain to all its own.
Now that we’re through that distinction, let’s get into why Shiba Inu is called the Dogecoin killer.
If you don’t already know, dogecoin is a meme coin that started a long time ago to poke fun at bitcoin and show that anyone could copy the code with some changes.
Dogecoin started to pick up some speed in the past few years and during the last year alone it has really grown in popularity.
Since dogecoin is its own blockchain and it’s kind of a copy of bitcoin. It doesn’t really have the cool upgrades that Ethereum has; something called smart contracts.
Smart contracts allow people to do many more things on the blockchain network than just send money back and forth.
For example, Smart contracts allow users to create new tokens, you can’t do that on the bitcoin or the dogecoin blockchain. Smart contracts also allow users to create applications like decentralized exchanges where you can swap your tokens.
We’re already getting off the topic.
The Shiba Inu token can utilize smart contracts. You can do things with it that you can’t do on dogecoin like lend it out or let other people trade with it while you collect their fees.
This is why they claim to be the dogecoin killer. You can just do a lot more with it.
How Did Shiba Inu Get Started?
Well, in august of 2020, a synonymous developer called Ryoshi started the project as an experiment in community governance. Meaning a test of how a community could decide on changes.
Now, an anonymous friend helped Ryoshi set up the smart contract token and also invested 10 Ethereum in an Ethereum and Shib pair on Uniswap.
This meant that people could give Uniswap some Ethereum and actually buy shib. Again check out our post on liquidity pools and how automated market makers work if you’re super curious about how all this stuff actually works.
Anyways, around mid-march of 2021 Elon musk made a tweet about getting a Shiba Inu dog which somehow caused the price to increase by 300 percent.
Something interesting that the Shiba Inu developers did was give half of literally every sheep token out there to Vitalik Buterin who created Ethereum.
They knew his wallet address and they literally just sent him a ton of sheep tokens. Many say this is for advertising purposes so that the developers could go hey look Vitalik owns some of our tokens then that means he believes in it when in reality you can send him any of your tokens you want and it doesn’t necessarily mean that they bought it.
Eventually, Vitalik took some of these Shiba Inu tokens sold them, and then donated the money that he got to charity. The rest of the tokens that he didn’t sell around 90% of what he was given he burned.
Burning a token is a phrase used whenever a person sends their tokens to a wallet that nobody else has access to. Meaning that those tokens are gone forever.
Here’s the important part though Vitalik burned around 6.7 billion dollars of Shiba Inu tokens.
SHIB offer Holders Rewards.
One of the unique things that we can do since SHIB is an Ethereum token is offer holders rewards for doing certain things with it.
For example, Shiba swap actually gives out rewards for people who provide liquidity to specific Shiba Inu pairs. They call providing liquidity digging.
Whenever you provide your tokens for traders to use, Uniswap has to give you something back to prove that you actually have ownership of that liquidity pool. What they give you is called liquidity pool tokens.
Why is this important?
Well, Shiba swap actually rewards users who take their liquidity pool tokens and lock them up. This way we know that the liquidity will be there for a while.
Technically, you can withdraw your locked tokens at any time. I’m not sure why they don’t just reward all liquidity providers. Maybe you can answer in the comments below.
However, when you stake or lock up your liquidity provider tokens. They call this burying.
When you bury your lp tokens, you start to earn a bonus. Bones are simply just another Ethereum token that is a governance token for the Shiba swap.
This means if you hold one bone, you get one vote on changes that happen to the project. Most people earn them and then immediately sell them, but some people buy and hold them.
This is where it starts to get weird. You can actually bury and stake these bones too but that’s just too deep for this article.
The reality is that they are inflationary at the beginning. So any economic students know what that means for the price; it’s gonna go down. This isn’t financial advice though.
Since you’re still reading this article, I’m gonna let you in on a tiny secret about providing liquidity.
If you create a project and the price of your coin greatly increases in price and you still hold some of that project’s coin, you might be thinking wow we should cash out.
The problem is that if the liquidity is low when you trade your tokens on Uniswap, you’ll crash the price unless you can get other people to provide liquidity, then when you dump a bunch of tokens at once the price doesn’t crash as much.
This way you can sell more of your tokens at a higher price.
Just keep all this in mind if you’re interested in providing liquidity to sheep. I was also going to mention a little bit in this post about Shiba Inu NFTs.but that part of the project isn’t completed yet so I don’t really want to talk about it.
What it Will Take to Reach the Price of One Penny.
There are a few things that I do want to talk about. Let’s talk about those videos that say what if sheep goes to one cent or even more daringly what if sheep goes to a dollar.
Now, I’m not here to say that that will not happen, but I am here to clarify what it would take for that to happen.
First of all, the MarketCap is a term used to compare cryptocurrency assets and is generally used to describe the average price of each coin.
You get this number by multiplying the current price of the asset by how many circulating assets there are.
Right now, the Shiba Inu token is worth around point zero zero zero zero five and the MarketCap is 21 billion.
This means if the price goes to one penny that means the total MarketCap would be four trillion dollars which is over the total amount of all money in every cryptocurrency ever including bitcoin.
If it goes to one dollar that would mean the MarketCap is 400 trillion which is way more than every house in the entire united states put together. Again I’m not saying this is impossible, but I want to give you the clear facts and let you decide.
All-time Highs
The next thing I want to talk about is all-time highs since the Shiba Inu token has been hitting all-time highs quite a bit lately.
Did you know when a coin or token hits a new all-time high, it means that everyone holding the coin is in profit?
Think about that. It means you’re assuming everyone out there is willing to hold on to their profitable asset, even those that probably need money today to pay their bills.
Anyways it’s challenging to hit all-time highs as consistently as Shiba Inu has. So make sure that if you invest that, it’s for a good reason as I personally know many friends who have invested only because they think the price will go up.
It seems to me that too many people are trying to make money without actually creating value. That usually results in a big crash, but I’m not saying that is what will happen; just restating what happens in history.
Psychological of Percentage Changes
The last thing I wanted to share with you is a little psychological, and it’s that many developers will make a ton of tokens out there so that the price is minimal.
Even if there’s a lot of money in it, the Shiba Inu token has 21 billion dollars in it, and the price is still fractions of a fraction of a penny. Don’t be fooled by these tricks.
The percentage change to go from one penny to two pennies is just as much to go from a hundred dollars to two hundred dollars even though your brain thinks it’s more difficult and more space to cover since the numbers are more significant.
It’s very unlikely that Shiba Inu would ever hit a dollar. If it hits one penny, we can be sure that it would be in the news since it would have a higher market cap than tesla, which just hit 1 trillion dollars and is creating massive value for hundreds of thousands of people in the world.
Hopefully, now you have a better understanding of the Shiba Inu token and how it works. If you’re interested in how you can earn money by using decentralized finance technology and you’re a beginner, you might want to check out the free guide, and you can also find our newsletter below.
Thank you guys so much for reading this post. I hope you enjoyed it. I really hope that you’ve learned something, and most of all, I hope to see you in our next blog post.
