Riding the 'Dogecoin' Wave, Shiba Inu Also Rises

Meme Coin Market Cap 2nd Place Shiba Inu Up 25%
Past 40% Crash Incident
Growing Pains in Development

[Image source=Shiba Inu Whitepaper]

[Asia Economy Reporter Lee Jung-yoon] Dogecoin, which has been frequently supported by Elon Musk, CEO of Tesla, surged more than 110% in a week following his acquisition of Twitter. However, the acquisition's impact extended beyond Dogecoin, influencing the price increase of meme coins (cryptocurrencies created using popular internet images or videos). Notably, Shiba Inu, the second-largest meme coin by market capitalization after Dogecoin, showed a significant upward trend.

According to the global cryptocurrency market tracking site CoinMarketCap as of 8:32 AM on the 1st, the price of Shiba Inu rose 5.13% compared to the previous day and 25.34% over the past week, reaching $0.000012 (approximately 0.02 KRW). Shiba Inu's market capitalization was recorded at $6.84266 billion (about 9.7713 trillion KRW), ranking 13th among cryptocurrencies listed on CoinMarketCap. As of the 30th of last month, its daily trading volume was $1.15987 billion (about 1.6563 trillion KRW), ranking 10th among all coins, which is about 6.7 times higher than at the beginning of last month.

Shiba Inu was issued in August 2020 to catch up with Dogecoin, the pioneer of meme coins. It is known to have been created by an individual called Ryoshi, positioning itself as a "Dogecoin killer." Like Dogecoin, it also uses the Shiba Inu dog as its mascot.

Shiba Inu is based on the Ethereum blockchain. Although it was created primarily for fun and is believed to lack a solid foundation, efforts to build its own ecosystem are underway. The Shiba Inu project team developed ShibaSwap, a decentralized exchange (DEX), to break free from the limitations of being just a meme coin. In their whitepaper, they describe ShibaSwap's goal as "providing a safe place to trade digital assets while maintaining decentralization."

On ShibaSwap, users can deposit cryptocurrencies and receive rewards, or exchange them for other cryptocurrencies such as Ethereum and the stablecoin Tether (USDT). It also offers staking, where users earn rewards as interest by depositing cryptocurrencies, and an exclusive non-fungible token (NFT) exchange feature called Shiboshi. Within the Shiba Inu ecosystem, three coins circulate: 'Shiba Inu,' 'Leash,' and 'Bone,' with 'Bone' serving as the base currency.

Additionally, a decentralized autonomous organization called Doggy DAO has been established. By staking Bone coins in the beta version 'Doggy DAO1,' Bone is converted into a coin called tBone. Holders of this coin gain voting rights on ecosystem policies, such as which projects to list. Projects receiving more votes are allocated more Bone coins.

However, investors should be cautious of controversies that arose during Shiba Inu's growth. Last year, the Shiba Inu development team transferred about 50% of the total supply to the public Ethereum wallet of Vitalik Buterin, the creator of Ethereum. This move is interpreted as an attempt to use Buterin as a marketing tool due to the lack of a solid foundation and the need to attract investors through publicity, a limitation of meme coins. In response, Buterin burned 90% of the received Shiba Inu tokens and donated the remaining 10% to an Indian COVID-19 relief fund. However, during the process of converting the donated Shiba Inu into cash, the price dropped by nearly 40%.