For any Defiers wondering why gas prices on Ethereum have been so high over the past few days, you can blame it on the dog — $SHIB, that is.
The meme coin’s revival through a new swap protocol has driven traffic, and gas costs, through the roof. While most meme tokens that moonshot and then crash stay dead and buried, $SHIB has just kept digging. And now, once again, $SHIB is back in the spotlight with a new Uniswap clone for meme coin lovers — ShibaSwap.
Shiba Token, or $SHIB, is best known as the “Doge-killer” meme token that soared over 30,000% during the hype in early May. It was created with a “safety mechanism” wherein 50% of the total supply had been sent to Ethereum founder Vitalik Buterin’s wallet for safe-keeping.
Or as the Shiba Token Woof Paper put it: “We sent over 50% of the TOTAL supply to Vitalik. There is no greatness without a vulnerable point and as long as VB doesn’t rug us, then SHIBA will grow and survive.”
This mechanism proved fatal for $SHIB when, on May 12, Vitalik immediately liquidated $1B worth of $SHIB to donate to the India Covid Relief Fund, and then burned another 40% of the total supply. $SHIB token value crashed back to the ground, falling 78.1% from its May 10 high of $0.000038 down to its current value around $0.000008.
But now, even though $SHIB token prices haven’t regained their former glory, dedicated members of the self-proclaimed “Shib Army” have found new, practical applications for their $SHIB.
ShibaSwap is, in essence, another clone of Uniswap and SushiSwap.
$SHIB holders can provide liquidity or “dig” for $BONE reward tokens. They can stake or “bury” tokens to farm yield (return rates have not yet been announced). Users can also play “fetch,” by migrating their UNI V2-LP or SLP tokens to ShibaSwap in order to earn extra $BONE.
Eventually, ShibaSwap users will also be able to access a “Bonefolio” to check their “dogalytics.”
If all of this sounds incredibly lame, now would be a good time to mention that within 48 hours of their July 6 launch, ShibaSwap already has 1.4B TVL, or roughly half of Sushiswap’s 2.9B TVL.
High ShibaSwap usage almost tripled average gas prices from 20 Gwei on July 5 to 55 Gwei on July 6.
Moreover, on July 6, the ShibaSwap contact was the number one gas consumer on all of Ethereum according to Etherescan’s top 50 Gas Guzzlers. SHIB token was No. 3 and the SHIBA migrator was No. 4.
As of writing, the ShibaSwap contract has settled down to the third highest gas guzzler on Ethereum.
But while ShibaSwap may be the hottest new thing in DeFi in the short-term, ShibaSwap’s road ahead is incredibly unclear. More importantly, it’s not actually decentralized.
The ShibaSwap whitepaper highlights its usage of a multisig wallet model, where transactional decisions require 3 out of 5 signatures from Multisig members who are “trusted members of the community and the DeFi environment.” The ShibaSwap “Ruffmap” lays out potential NFT projects and a “Doggy DAO” governance system on the horizon, but details on these are nebulous for now.
Certainly, it’s within the realm of possibility that ShibaSwap could be the next big DeFi protocol with a particularly good sense of humor. But be careful with this one, as without clear plans forward and potential avenues for total liquidation by a small team of key holders, $SHIB owners could very well find themselves stuck holding a big bag of doggie poop.