Shiba Token - The DOGE Coin Killer???

Shiba Token - The DOGE Coin Killer???


DOGE coin is one of the hottest cryptos in the market. It's up over 18,000% in a one-year period, people love it, and Elon Musk just Tweeted asking if Tesla should accept DOGE as payment. Anytime a cryptocurrency becomes popular, we see a variety of "killer coins" come into the market to dethrone the champ, and in today's post, I'd like to introduce you to the "DOGE Killer" Shiba Token. Although Shiba Token is fun and lighthearted, it is a serious cryptocurrency with a serious message.

Shiba Overview

Although the Shiba Token follows in Doge Coin's footsteps and could be considered a meme coin, that doesn't mean that it is a joke by any stretch. CoinGecko reveals some impressive trading performance including over 35,000% price appreciation in the last 30 days as well as over $7 Billion trading volume in a 24 hour period. Obviously, I do want to point out that this is an INSANELY high APY and past performance is no indication of future profitability. I don't point out the price action as a form of financial advice but rather to show that the token does have considerable support. 

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Although the price action of the coin is impressive in and of itself, I believe that the real value that Shiba brings to crypto is how it was created. Shiba Token reminds us of the importance of true decentralization in cryptocurrency. After Shiba Token was created, 50% of the funds were sent to liquidity on Uniswap and 50% were sent to Vitalik Buterin.

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In other words, there is no "admin fund", "team fund" or "marketing fund" that the team has reserved for themselves. The founding team is treated the same as any other investor, and if they own any of the coins, they had to buy them on the open market just like every other investor. Because the founding team has to buy the tokens like everyone else, the possibility of an ICO pump and dump is completely eliminated.  

The Mysterious "Admin Fund"

When I see some projects reserving up to 50% of the tokens for promotion, partnerships, marketing, and team expenses, *cough cough Student Coin*, I think it is natural to question how decentralized the project truly is if such a large portion of the coins are held by the founding team. Even if the team acts in a completely benevolent way, people will always doubt that the team has an alterior motive. 

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Anytime the price drops, people will be quick to claim that admins are dumping. When the price goes up, it's labeled an admin pump. By ensuring that the team is on a level playing field and doesn't have any special privileges, this concern is eliminated. 

Don't get me wrong, I do think that using a new coin to promote the coin can be useful, but Shiba reminds us that it isn't necessary and that a coin can grow to a $7 Billion trading volume and community of over 260,000 individuals without a marketing budget or team fund. Are there great coins out there with a team or admin fund? Sure, but I think Shiba reminds us it is always important to scrutinize why an admin fund is needed, what the team is doing with it, and how it benefits the project as a whole.

Shiba Ecosystem

Although the Shiba Token gets most of the spotlight, the Shiba Ecosystem is much larger and is planned to include Shiba Swap ( a decentralized exchange) as well as the Leash token and the Bone Token. Leash Token is an interesting concept as it is designed to be a synthetic hedge to DOGE on the Ethereum chain. It also employs a unique rebase feature (similar to AMPL) that targets a ratio of 1000 : 1 with the price of DOGE. I personally don't do a lot of hedging, but I could see how this could be a powerful tool considering that a doge price of 4.3 cents would equate to a Leash price of $43. 

Lastly, the project encourages people to donate to a Shiba Inu rescue charity when they checkout through Amazon Smile. For those of you who don't know, when you check out through Amazon Smile instead of normal Amazon, Amazon donates a bit of the purchase price to the charity of your choice. It doesn't cost you anything and can be a great way to contribute to a cause you believe in. 

Summary

In all honesty, I am terrible at making predictions, so I won't even try to say whether Shiba will overtake Doge or suggest whether or not it is a good investment. With that behind said, I do think that Shiba sends a strong message that we should always scrutinize how much a team reserves for themselves through admin/team/promotion/marketing funds. 

Not that any of these funds are necessarily wrong, but we also shouldn't take them for granted and we should always form our own opinions of whether or not the team is using the funds in the interest of the project or themselves. Lastly, I think the LEASH token will be an interesting hedge to DOGE when it finally rolls out. 

 

As always, thanks for reading. Nothing is financial advice. 

 

 

References

https://www.coingecko.com/en/coins/shiba-inu

https://allhailtheshiba.medium.com/all-hail-the-shiba-an-experiment-in-decentralization-87e3792e92f2

https://www.studentcoin.org/whitepaper

https://allhailtheshiba.medium.com/the-ascension-of-shib-and-next-steps-for-leash-4aea97ea4f25

 

 

 

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The Part Time Economist
The Part Time Economist

Hi everyone. I'm just a simple man trying to make my way in the universe. I am passionate about cryptocurrency and hope that I can make at least some small contribution towards promoting wider crypto adoption and understanding.


The Part Time Economist
The Part Time Economist

Hi everyone. This is just a place for me to post some of my thoughts and analysis. I hope that someone finds them useful.

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