1.
What is Shibarium?
Shibarium is an upcoming layer 2 (L2) blockchain network built on Ethereum for Shiba Inu. It will transform Shiba Inu, a meme coin, into a complete ecosystem.
Ryoshi, the anonymous creator of Shiba Inu, proposed the Shibarium project in a now-deleted blog post in May 2021. This project aims to build a blockchain layer-2 solution on the Ethereum blockchain. The expansion will transform Shiba Inu from a memecoin into a comprehensive ecosystem that includes decentralized exchanges (DEX), virtual worlds, and blockchain games such as Shiba Eternity.
Memecoins are cryptocurrency tokens depicted in funny or animated internet memes. These tokens are often highly volatile, largely driven by pop culture, and have ample supply leading to high inflation. The total supply of Shiba Inu ( SHIB ) itself is 1 quadrillion, which equals 1,000 trillion. The Shibarium portal aims to reorganize Shiba Inu into a multi-project and stable ecosystem.
Shibarium developers have yet to announce a launch date for the project. However, an alpha preview of the SHIB metaverse is part of the project, which was showcased at SXSW 2023 from March 13-15. The release was originally scheduled for February 2023, but was delayed as developers were keen to roll out a bug-free version that went through various stages of thorough testing.
2.
What does Shibarium mean to Shiba Inu?
Advantages of using Shibarium include higher transaction speeds, lower fees, greater token utility and seamless decentralized application (DApp) development.
Despite its upgrade to a Proof-of-Stake (PoS) blockchain via Merge, the Ethereum blockchain continues to struggle with scalability despite its strong security layer. Shibarium is also a PoS project that will help Shiba Inu scale while remaining connected to the Ethereum blockchain. Shibarium is expected to stabilize SHIB's value and transform Shiba Inu into a value-added project with long-term prospects.
Let’s take a look at how Shibarium will unlock the potential infused in memecoin.
Better transaction speed
By adding layer 2 to the Shiba Inu ecosystem, Shibarium will increase throughput, allowing the project to handle significant growth. Shibarium is expected to significantly increase transaction speeds, but users will have to wait for more time to get accurate information on throughput.
lower costs
High transaction fees have always been an issue for anyone transacting on Ethereum. Sometimes, the fee is higher than the transaction amount. For example, a small transaction worth $10 may incur a hefty fee of $50 worth of Ethereum ( ETH ). The introduction of Shibarium layer-2 solutions may make the gas cost negligible.
complete ecosystem
As opposed to being a mere memecoin, the Shibarium ecosystem will be comprehensive and include multiple projects, including the SHIB metaverse, ShibaSwap DEX, and blockchain games. The metaverse and games are expected to attract users, while DEX will provide better liquidity.
Token utility
Despite over 40% of tokens being destroyed, SHIB’s ample supply has become a huge obstacle to its growth. Shibarium solves this problem by introducing BONE as a native token. When Shibarium takes off, validators on the network will be paid in BONE to secure and validate transactions. Moreover, in the new ecosystem, every transaction consumes SHIB, which is a mechanism to control the extreme expansion of SHIB supply.
DApp development
DApps are decentralized applications whose backend code executes on a decentralized peer-to-peer (P2P) network. However, memecoin simply does not have the necessary capital to act as a native token for DApps. Shibarium intends to develop a robust ecosystem including layer 2 solutions integrated with Ethereum. It will provide the technical capabilities to create DApps in the ecosystem.
3.
How will Shibarium work?
Shibarium will remove large numbers of transactions from the Ethereum blockchain, increasing throughput without compromising security. The mechanism of burning tokens will help control inflation.
The upcoming Shibarium will operate by processing transactions while retaining Ethereum’s security layer. With most network activity being handled by Shibarium itself, Ethereum will be freed from the massive transaction volumes that could overwhelm it. This will result in faster but more secure transactions.
Before the adoption of PoS, Ethereum’s low throughput caused network congestion and pushed gas fees to an astronomical $50-80 per transaction. Merging increases the throughput of the network and reduces fees. L2 solutions are still needed because the underlying blockchain has to deal with a series of slowdowns.
In order to stop the inflation of SHIB tokens and allow their price to increase, the Shibarium portal will have a mechanism to destroy SHIB tokens paid as fees for executing transactions. This will reduce the number of coins in circulation and stabilize the price of the token.
Token burning is a mechanism that sends tokens to a one-way wallet that accepts the tokens but never releases them. The coins were lost forever. The continued burning of coins over time keeps cryptocurrency projects’ inflation at bay.
4.
Which coins will make up the Shibarium ecosystem?
The Shibarium ecosystem will have several tokens with different roles.
Shibarium will have a very different appearance compared to Shiba Inu. However, the new ecosystem will have several digital tokens, all named to fit the dog theme:
SHIB: Since August 2020, SHIB is an ERC-20 token that powers Shiba Inu. Its price has fluctuated, never exceeding the $1 per coin mark.
BONE: BONE is the governance token on ShibaSwap and now the utility token in Shibarium. Developers get paid in BONE. The token’s supply is capped at 230 million tokens.
LEASH: The supply of LEASH is limited to 107,646 tokens, which holders stake to receive rewards. Rewards include xLEASH tokens that users can mint after unstaking.
TREAT: Designed as a reward token, TREAT will be paid out to validators and developers together with BONE after reaching a certain threshold. It will also incentivize liquidity pools on ShibaSwap.
SHI: The Shibarium ecosystem will also have the SHI stablecoin. The purpose of SHI is to offset and balance payments while avoiding market volatility.
Related: How and why are stablecoins decoupled?
5.
What is the role of the SHIB metaverse and ShibaSwap in the Shibarium ecosystem?
The upcoming metaverse and DEX in the Shibarium ecosystem will have several use cases to give users a reason to jump on the network.
The SHIB metaverse is an immersive 3D virtual space with 11 hubs, each with different functions. An alpha preview of Metaverse was on display at SXSW 2023 from March 13-15, showcasing the WAGMI Hub, the first of these hubs focused on health and wellness.
At the center of the Metaverse, users can benefit from a range of use cases, such as building digital businesses, introducing real-life businesses, developing commercial and residential structures, playing innovative games and even decentralized finance (DeFi) platforms. A total of 100,595 tiles will be unlocked in the Metaverse over time.
To participate in the land bidding and purchasing process, users can use the MetaMask wallet. Bidding and buying require ETH. Users will find a virtual place in the hub to explore, discover, trade, sell and buy items. The team hopes to provide the community, called ShibArmy, with a dynamic world that rewards their participation.
As a hard fork of the SushiSwap DEX, ShibaSwap enables users to perform a range of functions. They can provide liquidity to earn BONE, receive non-fungible token (NFT) drops, bury (stake) tokens to earn rewards, swap tokens, vote for their favorite cryptocurrency pairs to receive BONE and Farm tokens.
