Definition of Shiba Inu – Cryptocurrency
After the meteoric rise of Gamestop, Dogecoin, and
other speculative assets, new cryptocurrency projects have attempted to
capitalize on the trend.
A new token called Shiba Inu, named after the dog
representing Dogecoin, has dubbed itself the “Dogecoin Killer.” But is Shib a
legitimate project, or is it just another altcoin looking to take advantage of
trends and unsuspecting investors?
A few facts:
·
Shiba Inu is an ERC-20 altcoin
created on the Ethereum blockchain.
·
The coin was created by an
anonymous individual by the name of Ryoshi and nicknamed the “Dogecoin Killer”.
·
There are nearly 400 trillion
SHIB tokens in circulation, with a maximum supply of one quadrillion tokens.
·
The creators of Shiba Inu
created an ecosystem of three currencies, SHIB, LEASH and BONE, and a
decentralized exchange called ShibaSwap.
·
Ryoshi sent Vitalik Buterin,
the creator of Ethereum, half of the token's supply.
·
Buterin gave away and burned
all of his holdings in early May, driving the price down.
·
SHIB's white paper was updated
after Buterin's donations, stating that they were good for the play and that
Buterin is a "friend of SHIB".
·
Some SHIB investors were
misled into believing Buterin was an investor in the project.
·
ShibaSwap received an audit
that revealed centralization risks where a developer had the power to “remove
all ERC20 boneToken tokens to any arbitrary address” they wanted.
What is Suba Inu?
Shiba Inu is an ERC-20 token created on Ethereum by an
anonymous individual known as Ryoshi. The Shiba Inu website states that the
coin is a decentralized meme (Japanese character) token that thrives in a
vibrant ecosystem.
“SHIB is a decentralized spontaneous community
building experience. The SHIB token is our premier token and allows users to
hold billions, if not trillions. Dubbed the DOGECOIN KILLER, this UNIQUE ERC-20
token can stay well below a penny and top Dogecoin in no time (relatively
speaking). »
The token white paper indicates that the intention is
to build an ecosystem consisting of three tokens with different purposes.
SHIB is the founding currency of the ecosystem, with a
maximum supply of one quadrillion (1 million trillion (1 trillion = 1000
billion)). LEASH is the second token created and has a supply of 107,646 tokens
and the third token is BONE with a supply of 250,000,000 tokens.
The team behind these tokens also created a decentralized exchange called
ShibaSwap, which allows users to “dig” “mine” (provide liquidity), “bury” (stake
coins), d “fetch” (collect tokens at Uniswap or SushiSwap) and exchange coins.
This exchange is similar to others on the Ethereum network, like SushiSwap and Uniswap.
Shiba Inu vs. Dogecoin
Dog-themed cryptocurrencies came out of the woods last
year. This phenomenon has been largely facilitated by meme culture and Elon
Musk's Twitter feed.
But what is the difference between the first classic
cryptocurrency, Dogecoin, and the new “dogecoin killer”, Shiba Inu?
Dogecoin
Dogecoin is a cryptocurrency that was built as a
parody of the ICO (initial coin offering) market during the 2017 crypto bull run.
It was a joke intended to poke fun at all the ridiculous scam coins and fakes
that were coming out at the time and used the massively popular
"doge" meme for his name.
Dogecoin was built with code from a bitcoin fork (forked) known as Litecoin, which
means it also uses the proof-of-work consensus mechanism. Unlike Litecoin,
however, Dogecoin has not been endowed with a maximum supply.
Blocks of Dogecoin are found every minute and 10,000
new Doge are rewarded to miners per block. This means that 14.4 million new
Doge are created per day.
shiba inus
Highlighting Dogecoin's appeal to meme culture, Shiba
Inu bills itself as a "decentralized meme token that has evolved into a
vibrant ecosystem." It also calls itself a “Dogecoin killer”, but how does
it actually differ from Dogecoin?
Shiba Inu is an ERC-20 token on the Ethereum
blockchain. This means that it was created and is hosted on the Ethereum
blockchain instead of having its own blockchain. Dogecoin, on the other hand,
has its own blockchain. ERC-20 tokens are stored and sent using Ethereum
addresses.
What really sets Shiba Inu apart from Dogecoin is its
ShibaSwap decentralized exchange. Shiba is thus part of the decentralized
financial ecosystem on Ethereum and allows its users to get certain features,
like token trading, staking, and yield earning, that Dogecoin does not.
An audit of ShibaSwap resulted in a number of
"major findings", including major centralization and privilege risks,
where a developer had the power to "remove all ERC20 boneToken to any
arbitrary address" that 'he wished. More importantly, if that person was
hacked, all tokens could be lost.
These issues have since been resolved, but ShibaSwap
has only been audited once and it's unclear whether or not the team keeps the
changes they showed the auditor.
Is the Shiba Inu part a safe investment?
Perhaps the most telling aspect of the coin's
legitimacy can be found in its white paper, or in the various versions of its
white paper that have been published since its launch. When Ryoshi created
Shiba Inu, they sent half the supply to Vitalik Buterin, the creator of
Ethereum.
The whitepaper contains a quote from Ryoshi saying “We sent 50% of the total supply to Vitalik. There is no greatness without a weak spot and as long as VB (Vitalik Buterin) doesn't bully us, then SHIBA will grow and survive. »
But on May 12, Buterin donated 50 trillion SHIB, worth
$1 billion at the time, to charity and then burned 90% of the remaining coins
he had. He then burned 90% of the coins he had. He said he would also donate
the remaining 10% to another charity.
Mr. Buterin added a note to his transaction warning
that anyone making new coins should never give them to him without his consent.
“For anyone creating coins (or daos, or whatever) in
the future, PLEASE DO NOT GIVE ME ANY COINS OR POWER IN YOUR PROJECT WITHOUT MY
CONSENT! I don't want to *wish* to be a place of power like that. It's better
to print the coins and put them directly into the hands of a worthy charity
(but talk to them first). »
SHIB's price plummeted on the news that Buterin had
given away all of his tokens. The community either assumed that Buterin was
intentionally invested or that he was involved simply because he owned a large
chunk of the token.
A new version of the white paper has been released
with a new section titled “Vitalik Buterin, Friend of SHIB”. The first sentence
of this section calls Ryoshi a visionary and that Buterin is a visionary like
him. She goes on to make a spelling mistake between Ethereum and Etherium.
“Like Ryoshi, the creator of Shib, Vitalik Buterin is
a visionary. One of the youngest billionaires in history, VB is the 27-year-old
creator of Etherium, and until recently held half of SHIB's total supply. »
The new section categorizes what happened with
Buterin's donations as its greatest strength and totally brushes off the fact
that SHIB has lost nearly 82% of its value since the donations and burns were
made.
A number of things are major red flags when
considering SHIB as an investment opportunity. The first is the result of the
audit and the fact that a developer had the privilege and permissions to simply
withdraw user tokens on ShibaSwap to an arbitrary address. Although these
issues have supposedly been resolved, the exchange has only been audited once.
The next red flag is the fact that the creator even
sent parts to Buterin in the first place. It's almost impossible to know the
real intention of the creator, but it is a marketing move. Many posts were made
in Shib's Reddit community about Buterin owning the token and being an
investor, which raised people's hopes.
Many examples of these Reddit posts exclaim that
Buterin is the owner of SHIB and that the coin is going to go to the moon.
This problem is further compounded by the insistence
in the new version of the white paper that Buterin is a friend of the project
when he clearly has nothing to do with it. And the fact that Ryoshi calls
Vitalik Buterin a visionary like him doesn't really sound like it's believable.
As with most cryptocurrencies, some level of
speculation is required to make an investment. While SHIB grabbed mass
attention last year due to meme culture, it's hard to apply any value from an
investment perspective.
The main concerns about SHIB stem from the actions of
its creator. Sending half the supply to Buterin, then altering the white paper
after the donations and the fire seems insincere. Calling Buterin a
"friend of SHIB" is also highly exaggerated, if not totally wrong.
And while SHIB has its own little ecosystem with a decentralized exchange,
it's unclear how safe it is to use compared to others like Uniswap that have
gone through a lot more audits. Ultimately, buying SHIB is like buying one of
over 11,000 altcoin lottery tickets.