Monday, June 24, 2024

Shiba Phenomenon. How the project became popular and why the token fell in price?

The memorial token first went up 26 times in a couple of days, and then its quotes instantly collapsed by more than 50%. What is the secret of Shiba success and what does Vitalik Buterin have to do with it?

Shiba Coin is an ERC-20 token on the Ethereum blockchain, named after the 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 unlike most other networks, Ethereum is truly decentralized, secure, and well established.

According to the founder of Shiba, it is Ethereum that allows the creation of free decentralized communities.

Shiba Ideas


On the project’s website, 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 Shiba whitepaper, which the authors jokingly call “woof paper,” says Shiba is an experiment in spontaneously building a decentralized community.

The creators of Shiba were inspired by the example of the Wall Street Bets community, which inflated the value of the shares of GameStop and several other companies. The creators of Shiba call their community “Shiba 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 the Shiba Swap decentralized exchange. On the exchange, it will be possible to engage in profitable farming and liquidity mining through the coins of the Shiba ecosystem.

Also, as part of the development of the ecosystem, the Shiba team will release their NFT tokens and a new Bone coin. There is already a second coin in the ecosystem, Leash. Its total emission is only 100 thousand coins, and the cost is $ 1.8 thousand, according to Coin market cap.

What does Buterin have to do with it?


The creators of Shiba claim that they were the first to abandon the practice of owning tokens by the founders and developers of the project. For this, 50% of Shiba was sent to the Uniswap exchange and blocked, and the remaining 50% were sent to the wallet of Ethereum creator Vitalik Buterin.

Ryoshi wrote in the white paper that “there is no greatness without vulnerability.” The creator of the altcoin stressed that “until Vitalik betrays the project, he will live and develop.”

The meme token has gained great popularity, and its price has increased many times over. In four days, the cost of Shiba has risen almost 25 times.

As a reaction to the multiple increase in the price of the token at the end of the May holidays, Shiba was listed on the OKex and Huobi exchanges. By this time, Shiba‘s trading volume was about $ 500 million, and after listing it had risen to $ 8 billion.

However, the hope for Buterin let down the creators of Shiba at some point. Of the 505 trillion Shiba tokens held in his wallet, the creator of Ethereum donated 50 trillion Shiba to charity in support of the India CovidCrypto Relief Fund. As a result, the Shiba price fell more than 50% from the high.

Perspectives


As in the case of Dogecoin, skeptics say large holders will sell their stakes in Shiba, and thus sharply reduce the price of the asset. However, the possibilities for this are limited. For example, the second largest holder of Shiba 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 receive about $ 4 million. For this reason, from May 3 to May 9, among the 50 largest holders of Shiba, only one sold tokens.

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