The meme token first rose in price by 26 times in a couple of days, and then its quotes instantly collapsed by more than 50%. What is the secret of Shiba’s success and what does Vitalik Buterin have to do with it
Shib Coin is an ERC-20 token on the Ethereum blockchain, named after Shiba Inu dogs. On the official website of the project, the tokens themselves are called “Meme Coins”. The project was launched in August 2020.
The founder of Shiba, hiding under the nickname Ryoshi, chose the Ethereum blockchain for a reason. He believes that Ethereum is truly decentralized, secure, and well-established, unlike most other networks. According to the founder of Shiba, it is Ethereum that allows you to create free decentralized communities.
On the website of the project, the token itself is called the “Dogecoin killer”, and it is said that its main task is to surpass the total capitalization of Elon Musk’s favorite coin without crossing the price mark of $0.01. The Shib whitepaper, which the authors jokingly call “woofpaper”, says that Shib is an experiment in the spontaneous construction of a decentralized community.
The creators of Shiba were inspired by the WallStreetBets community, which inflated the value of the shares of GameStop and a number of other companies. Shiba creators call their community “Shib Army”. According to their estimates, this “army” already includes more than 120 thousand people.
Shiba’s main goal is to create the best Decentralized Ecosystem (DECO) on the planet. The first step towards this will be the creation of a decentralized exchange Shiba Swap. On the exchange, it will be possible to engage in profitable farming and liquidity mining through the coins of the Shib ecosystem. Also, as part of the development of the ecosystem, the Shib team will issue its NFT tokens and a new Bone coin. There is already a second coin in the ecosystem, Leash. Its total supply is only 100 thousand coins, and the cost is $1.8 thousand, according to Coinmarketcap
The creators of Shib claim that they are the first to abandon the practice of owning tokens by the founders and developers of the project. To do this, 50% of Shib was sent to the Uniswap exchange and blocked, while the remaining 50% was sent to the wallet of Ethereum creator Vitalik Buterin. Ryoshi wrote in a white paper that “there is no greatness without vulnerability.” The creator of the altcoin emphasized that “until Vitalik betrays the project, he will live and develop.”
The meme token gained great popularity, and its price increased many times over. In four days, the value of Shib has risen by almost 25 times.
As a reaction to the multiple increase in the price of the token at the end of the May holidays, Shib was listed on the OKex and Huobi exchanges. At this point, Shib’s trading volume was about $500 million, and after the listing rose to $8 billion.
However, the hope for Buterin at some point failed the creators of Shib. Of the 505 trillion Shib tokens that were stored on his wallet, the creator of Ethereum donated 50 trillion Shib to charity in aid of the India Covid-Crypto Relief Fund. As a result, the price of Shib fell by more than 50% from its high.
.As with Dogecoin, skeptics say that large holders will sell their stakes in Shiba and thus drastically reduce the price of the asset. However, the possibilities for this are limited. For example, the second largest Shib holder had $176.5 million worth of tokens, but did not sell them. This probably happened because the liquidity available on the exchanges would only be enough to get about $4 million. For this reason, only one of the 50 largest Shib holders sold tokens from May 3 to May 9.