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Is Shiba Inu the Next Great Memecoin?

The past few weeks have seen the extreme rise of another memecoin – Shiba Inu. The numbers behind this project cannot be ignored. Over the past year, the price of the SHIB coin has risen over 27 million percent. Let that sink in for a moment. This catapulted Shiba Inu into the top 10 cryptos with a current market cap of about USD $37.6 billion – closing fast on Dogecoin.

At first glance, Shiba Inu is just a knockoff of Dogecoin. Though this is not necessarily untrue, SHIB may have more to it than you think. Read on to learn about the fundamentals of this project and why it may have the potential to be a “Dogecoin killer”.

Shiba Inu

Shiba Inu’s Story

Shiba Inu was started by an individual under the pseudonym “Ryoshi”. According to Ryoshi, Shiba Inu came to be when his idea was pitched to an influential figure in the crypto space. This anonymous person contributed a bit of work and 10 ETH to get the project off the ground. Ryoshi then did a queer thing. He sent half of the total initial supply of SHIB tokens to Ethereum founder, Vitalik Buterin. Though nobody really knows why Ryoshi did this, it was likely for marketing purposes.

The SHIB coin stayed dormant for the first few months of its existence. It wasn’t until a tweet from Elon Musk in March of last year that it saw its first big pump. The project’s first whitepaper was released shortly thereafter. They called it, of course, their “woofpaper”.

A second version of their woofpaper has since been published. These woofpapers communicate that Shiba Inu will not remain just a memecoin. They are actively developing a DeFi ecosystem. To quote their website, Shiba Inu is “a decentralized meme token that evolved into a vibrant ecosystem”. Within this ecosystem are “leash”, and “bone” tokens, a DEX called “Shibaswap”, and a DAO they refer to as the “DoggyDAO”.

There is evidence to support that Shiba Inu is not a “pump and dump” scheme. The founder, Ryoshi, doesn’t hold any SHIB tokens to avoid any conflict of interest. He also expresses a commitment to decentralization. His role in the project has diminished as many of the project’s decisions are being decided by the project’s community. A look at the top holders of SHIB tokens reveals an equitable distribution of SHIB holders too (the largest one is the burn address).

Is Shiba Inu Safe?

Of course, cryptocurrency is filled with high-risk projects, especially memecoins. Shiba Inu has proven, however, that they aren’t entirely profit-seeking. Despite their success, can we trust that the Shiba Inu ecosystem has a robust design?

As stated above, Shiba Inu is being developed with the goal to be a DeFi project. As DeFi has grown, DeFi auditing companies have emerged to test the quality of the new protocols.

One such emerging DeFi protocol auditor isn’t very optimistic about Shiba Inu. They are called DeFi Safety and gave the ShibaSwap protocol a score of 35% – a fail. To summarize, DeFi Safety’s process quality reviews (PQR’s) assess a protocol in five sections:

  1. Code and Team
  2. Documentation
  3. Testing
  4. Security
  5. Access Control

Of these sections, ShibaSwap was only able to build a score through evidence of their woofpaper and some information available in the Access Control section. If indeed relevant evidence exists to boost their score in the other sections, it has not been made publicly available.

Perhaps the most well known DeFi auditor is CertiK. They completed an audit of Shiba Inu’s Shibaswap back in August and gave an overall score of 91%, which has been brought down to 87% since. This is impressive, but also concerning. This score places ShibaSwap as one of the top 12 projects in terms of overall security on their leaderboard. It is unclear from Certik’s website how they undergo their assessments of a protocol. In contrast to the clearly defined process used by DeFi safety, one wonders how CertiK came to their conclusions.

Dog Coins to the Moon, and Beyond

Dogecoin inspired a host of “Dog Coins” to take their chances to shoot for the moon. Baby Doge Coin (BABYDOGE), Akita Inu (AKITA), Husky (HUSKY), and Dogelon Mars (ELON), to name a few. Each project seems to emulate Shiba Inu in the form of “we are an experiment in decentralization”, have a supply of 1 quadrillion, and send half of their supply to Vitalik Buterin.

Given the potential billions of dollars to be made, you can’t blame these guys for giving it a shot. Who knows how far this memecoin thing will go? Other than SHIB, Dogelon Mars (ELON) is looking like a project to watch. The moon isn’t enough for the ELON coin. They’re aiming for Mars, and to be the first intergalactic currency. The ELON coin has seen a 100% increase in the last week since writing, and almost 400% in the last month.

What the Heck is Going On?

I’m not going to pretend to believe that memecoins should be considered serious investments. I like the philosophy behind the absurdity of these projects, but the fact that simple animated dog coins can attract billions of dollars is going to take me a while to absorb.

The SHIBA token, like DOGE, started as a joke, then gained billions of dollars in momentum. In this bull market, they are running with the momentum, and rebranding themselves as a DeFi meme token. They seem to have functionality, but the lack of transparency of their protocol is concerning. Will SHIB see another dramatic price drop after the current rally? As far as we can tell now, SHIB’s “experiment in decentralization” is looking like the next great memecoin.

Check out our complete Shiba Inu overview to learn more about the coin.

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Gerrit van Sittert

About the Author

Gerrit van Sittert

Gerrit van Sittert is a cryptocurrency investor keenly interested in the ramifications of blockchain technology. Since graduating from a commerce and entrepreneurship degree, he has specialized his knowledge of how cryptocurrencies are set to impact the global supply chain and emerging markets. He started his crypto journey in 2017 while hosting an entrepreneurial focussed meetup group in Victoria, BC.

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