Alright happy people, given the rising hype on this coin I have decided to make it my first DD on this forum. We will touch base on many points, and I will also include a summary (TL;DR) at the bottom for those who can’t stomach reading several paragraphs of something they may/may not be interested in.
Disclaimer: I am not some crypto-guru, genius, developer, or anything of the sort. Just a guy who has been in crypto since about 2016, and over the last year gone a little heavy in looking at various projects and, yes, making a decent amount of money trading them. I am genuinely “Long” on crypto, and I do believe it will completely take over the way we do things over the years to come, from financial systems to data integration, and even how we play video games. Until that point, I plan to accumulate the projects I see as potential “survivors” after the inevitable culling that will take place, and likely trade/swing the others for some easy money while it’s still easy to do so.
Now for some background:
SHIBA INU (SHIB) is a meme coin that began its life in August 2020 and was created by an anonymous entity known only as “Ryoshi“ on the Ethereum (ETH) blockchain. I won’t get into all the conspiracy theories surrounding its creation, but know that on their site and in their [white paper](https://whitepaper.io/document/758/shiba-inu-whitepaper) (or “woof paper” as they call it) claim to be a decentralized meme token completely controlled by its community. Which sounds nice, and is a great idea in my opinion as a DeFi enthusiast, but should be taken with a grain of salt, as with any self-proclaimed “DeFi” project.
The project quickly grew into a community over the next few months, especially since it came up in a time of meme dog coins that were fractions of pennies in cost on the curtails of Dogecoin (DOGE), which at the time was retesting upper support levels in the 0.0033-0.0035 range. In fact, SHIB is the self-proclaimed “DOGE Killer” which likely helped spur its popularity in the Spring 2021 season, when DOGE was getting ready to hit its ATH and SHIB was following suit.
All that said, this is a pattern we have seen time and again because people are always looking for that “next thing” when a popular asset is running up. It is a behavior that has led to many a rug pull, and I estimate will lead to several more until regulations build up around crypto. This is exactly why anyone looking to get into the space should be careful and do their DD. Especially with projects like SHIB that were made as a meme by anonymous people.
Now let’s talk fundamentals:
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SHIB has been far more ambitious than other meme coins, to include DOGE, as they have a rudimentary roadmap (more like a list of goals from the woof paper) and seemingly have more dedicated developers and community. Just take a peek at their Reddit or Twitter, like a damn cult in there
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They have their Decentralized Exchange (DEX) ShibaSwap, which seems to be working as advertised and provides a basis for their tokenomics, which consists of the following tokens and functions:
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SHIB - main token, what is available for purchase across multiple platforms and can be bought and sold like most other crypto’s. 1 quadrillion supply was minted, 50% of which was sent to ETH Co-Founder Vitalik Buterin in an attempt to “burn” half the supply, which was done without his permission. You may have seen the news articles of him using some of this in a donation to India for disaster relief (about 5%). The other 45% was sent to a burn wallet. If you’re keeping up with the math, this leaves about 50% of the original supply, about 495 trillion, which was sent to a Uniswap wallet and is the current liquidity pool, with no private keys. In other words, SHIB is quite decentralized since no one person or group has access to the main liquidity pool.
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Leash Dogecoin Killer (LEASH) - like SHIB, it is an ERC-20 token and is an integral part of ShibaSwap, but that’s about where the similarities end. This token was actually made to be the opposite of SHIB. It has a minted supply of about 100K, and was originally meant to be a rebase token for the DEX, but the plan changed and instead it is a main part of the liquidity pool and tokenomics of ShibaSwap. As you may have guessed, due to its comparatively tiny supply, this coin is actually the highest priced of all dog meme tokens, currently priced at about $1,854 with an ATH of about $8,983. There are none in circulation, as all are owned, and so it’s price is fairly dependent on SHIB and the third and final Shiba ecosystem token…
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Bone ShibaSwap (BONE) - the governance token of ShibaSwap which allows holders to vote for changes and upgrades for the ecosystem. More BONE = More weight to the holder’s vote. It’s supply lands between SHIB and LEASH at about 250M, making its valuation between the two as well, currently about $1.96.
- With all that said, I think it’s time to get into the thing that sets coins apart: tokenomics. The main features of ShibaSwap and the SHIB coins’ tokenomics are as follows:
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Bury - the equivalent of staking your tokens. Each of the 3 pay you in slightly different ways for burying:
- SHIB pays you in BONE and xSHIB, specifically 3% of the BONE you earn is given as xSHIB which in turn receives 0.3% of all the ETH transaction fees that occur on ShibaSwap. They call this the “double return puppy pool.”
- LEASH pays in xLEASH at a rate of 0.5% of BONE blocks mined.
- BONE pays in tBONE at a rate of 1% of BONE blocks mined. -
Dig - the equivalent of farming tokens. This feature involves liquidity pairings (LP) which are when you provide a 1:1 ratio of two different tokens (like if you put in 1M SHIB and the equivalent in ETH or BTC). In turn, you earn a portion of the liquidity pool in the equivalent token pairs, along with 0.3% of all WBTC and USDC transactions for Digging LEASH or 0.3% of all DAI and USDT transactions for Digging BONE. This is all dependent on the number of Allocation Points you have for each pair, in other words how much you put into the liquidity.
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I’ll also note that all returns for both Burying and Digging your tokens will have 33% immediately available after payout and 66% locked up for 6 months.
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Lastly, I’ll mention there are a couple of other mechanics in the tokenomics involving the payment of the developers, marketers, and admins. I won’t get into these details in this post, but be sure to check out the woof paper I linked above.
Pros: (no particular order)
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Moon Possibility: Due to low price, high supply, and strong sentiment/community just about anyone can throw money at SHIB and make a positive ROI. As long as you follow the news and watch for trend setters/breakers (media, influencers, businesses, etc.) mentioning SHIB in a good or bad way, you should be ok for now.
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Active Marketing: Unlike many other meme coins that fall silent for long periods of time, SHIB has an engaged team and community, they actually just made a new official Twitter account on 10/26/21 for their DEX specifically.
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Development: So far the team has kept on track with their roadmap (ruffmap) and delivered when they say they have something, usually with only minor delays/issues.
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Decentralization: Currently there is no indication that a person or core group of people own the majority of SHIB or the other tokens. LEASH itself, the only token of the 3 lacking a circulating supply, has just over 26K unique addresses tied to it’s supply. But there is another side to this coin that I mention below…
Cons: (in order)
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Anonymous Origins: No one knows the creator, no one knows much about the current team. Your guess is as good as mine. The claim is “community control” but at the end of the day, the folks behind the curtain control the code and there is zero way to hold them accountable.
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No Safeguards: although the Shiba ecosystem is currently decentralized, there is nothing mentioned that would prevent one person or group of people from buying up a majority of the BONE and thus having complete governance of the ecosystem. The beauty of crypto is how public records are, but one of the biggest pitfalls of truly decentralized projects is the lack of control and regulation, which opens the door to HEAVY manipulation.
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Sentiment Play: The same factor that brings you to the heavens in returns, can bring you to your knees in losses. Unlike traditional assets with strong fundamental analysis or technical analysis, SHIB is completely dependent on trend analysis. If you try to play this based solely on technicals, you will lose. Given the short existence of this coin and mysterious/fanciful origins, it’s also hard to really give it a vote of confidence in terms of fundamentals. So, we must rely on public sentiment and things like the Fear and Greed index, along with news, to really decide our plays. It’s great when it works, but it will undoubtedly leave some bag holders at some point, unless some impressive strides are made to improve the ecosystem.
Summary: (TL;DR)
Overall, there is a good bullish case for SHIB and it’s ecosystem. It is definitely a great play for some quick gains in our current bull-market, and will likely make many of you happy. But, what goes up must come down, and when this drops it will hurt for those who miss their exits. The project lacks accountability and is loosely supported. If you’re in it, you are completely at the mercy of public opinion currently, and also leaving yourself open to a HUGE market manipulation risk.
Personally, I’m playing it and don’t plan on fully exiting my position for another 0 (PT: 0.0001) which I estimated would be by EOY, but given the current trend it may be a bit sooner. If so, I will adjust accordingly, taking my profits and leaving a smaller position till the peak of the crypto season, and then likely pulling out. But you do you. Stay frosty my friends, this dog has no master.
