ETH’s and BTC’s impressive recent growth had nothing on dog-based meme coins ––at least until Ethereum’s creator, Vitalik Buterin, stepped in to sell a large chunk of the token’s total supply to give the proceeds to charity.
GameStop stock and Dogecoin have proven memes have real market power. But the thing about meme coins is that, with no need for proper fundamentals, there’s always a fresher meme right around the corner. Enter the new top dog in crypto: SHIB. Which, at least for a brief time, was flying high.
As of May 12, Vitalik Buterin, who had half a quadrillion SHIB, or 50% of the total supply based on the protocol’s rules, sold 50 trillion of the tokens, or over $1B, to donate to the India Covid Relief Fund. This removed significant liquidity from the SHIB pool and sent SHIB’s price spiraling downwards.
Vitalik also dumped a number of other meme tokens which had been sent to his wallet including AKITA and ELON, and donated the proceeds to numerous other charities including Givewell and the Methuselah Foundation.
Shiba Token, the Dogecoin Killer
Shiba Token, or $SHIB, is a decentralized, Ethereum-based meme token conceived as an “experiment in decentralized spontaneous community building” according to the official Shiba Token website. The creators have also nicknamed SHIB “the Dogecoin Killer.”
In August 2020, one quadrillion SHIB tokens were minted. Of the total supply, 50% was put into Uniswap and the other 50% was “burned,” or sent to Ethereum founder Vitalik Buterin’s wallet.
As explained in the Shiba Token Woof Paper: “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.”
Essentially, this meant that as long as Vitalik didn’t dump all of his tokens, there would always be a failsafe against a small group of whales gaining a majority share of SHIB tokens. This could be contrasted with DOGE, of which 28% of the total supply is held by a single anonymous wallet, and the top 100 Dogecoin addresses own 68% of the total supply.
Of course, Vitalik has since dumped all of his SHIB tokens.
For reasons that are hard to pin down in this hype-driven market, the meme gods were temporarily looking favorably upon SHIB, and the coin had been up more than 25 times in the past month alone.
The surge had driven Vitalik’s share of SHIB to be valued around $15B. That was more than the Ethereum creator’s ETH holdings, now valued at $1.3B.
While SHIB prices remained dormant for months after its inception, this May’s surge in DOGE has led to a SHIB gold rush of sorts.
ETH, with all of its practical use-cases, from decentralized banking to digital art markets, has grown 93% over the past month, from $2,130 to over $4,100. Meanwhile, DOGE, the intentional joke coin based on the Doge meme, skyrocketed to $0.49 at time of writing from $0.07 a month ago, a 600% increase, dwarfing that of ETH.
But even DOGE’s massive growth couldn’t hold a handle to SHIB prior to May 12. Over the past 30 days, SHIB prices had grown to highs around $0.000034 from $0.00000011 a month ago, an astronomical increase of over 30,000%.
To put SHIB’s growth into perspective, one wallet purchased $17 worth of SHIB, or roughly 200B tokens, in October 2020. On May 11, that SHIB was worth $6.4M.
SHIB was actively trading as well, with a 24-hour trading volume of $12.3B, at a $13.3B market cap. That wasn’t too far off from DOGE’s 24-hour trading volume of $15B, with the 4th highest market cap of any cryptocurrency at $64.7B.
Massive interest in SHIB even resulted in higher gas prices throughout all of Ethereum. From May 8 through May 11, SHIB token contract interactions consumed over 10% of block gas, as shown in a SHIB gas usage chart posted by The Block researcher Igor Igamberdiev on Twitter.
The Future of SHIB
While Shiba Token’s ethos is built on memeing, the founders of Shiba Token have outlined a decentralized ecosystem with its own mechanisms for swapping, staking, and liquidity pools with reward tokens for holders called ShibaSwap.
ShibaSwap will include two more tokens with distinct tokenomics—LEASH, conceived as the opposite of SHIB with an extremely limited supply and increased staking rewards compared to SHIB, and BONE, for which the functionality has not yet been revealed.
The Shiba Token team also plan to release NFTs and physical products, suggesting that SHIB may potentially be a meme token with more developer support and widespread appeal than the average shitcoin.
To be sure, despite its recent surge and indications of continued support and functionality, SHIB is just as risky an investment as any other meme coin. Any practical use-case is still completely unproven, and at this point, not even fully outlined in the Woof Paper.
While “SHIB TO $0.01” memes may be fun to shill on Twitter, there’s also a chance that SHIB will fall to zero, especially after Vitalik’s SHIB dump.
So remember, woof responsibly.
[UPDATED 5/12 @5PM EST TO CORRECT AMOUNT OF SHIB SOLD IN SECOND PARAGRAPH]