Crypto meme project Shiba Inu prepares to leave its layer 2 mark with ‘Shibarium’
Many a crypto expert has flagged “layer 2” networks as a sector to watch this year. But here’s one that might feel slightly out of left field for them – dog meme coin Shiba Inu’s “Shibarium”.
Hang on, dog meme coins, layer 2s? Yep, it’s all a bit What the Floki if you’re new around here.
Nutshelling it for you then… dog meme coins – like Dogecoin, like Shiba Inu, like Floki Inu, like, er, BONK – some of them are extremely popular in the crypto world and have fanatical communities who propogate their fave tokens’ value, use case and utility as being something akin to Bitcoin and Ethereum.
— Altcoin Daily (@AltcoinDailyio) January 16, 2023
Meanwhile, layer 2s (such as Polygon, Optimism and Arbitrum) – these are essentially blockchains that sit and run on top of another blockchain (a layer 1, such as Ethereum) and are partly built to help scale the base blockchain layer.
If that makes absolutely no sense to you, then you might be in the wrong place, but maybe have a further delve through Coinhead to glean more info on this crazy crypto stuff while your interest is half piqued.
But onto Shibarium, which, yes, sounds fancy and kinda stupid at the same time – probably a deliberate choice.
Like the vast majority of cryptos over the past week or so, the Shiba Inu token SHIB has had a pretty impressive rise (roughly 25% over 14 days) due to external market/macro factors such as cooling US inflation.
But what’s also contributed is the high anticipation of the imminent beta launch of Shibarium.
Simply incredible. The moment we’ve been waiting for is coming ShibArmy and I couldn’t be more excited for the future of the ecosystem!
— JD’s Updates (@jds_updates) January 15, 2023
On January 15, the project’s developers released blog-post details that its layer 2 network is “coming soon” and will bring with it a host of benefits to the Shiba Inu ecosystem, including reduced network fees and faster transactions.
Shibarium will also increase the use case of NFTs on the network – largely because of the reduced transactional fees.
The “SHIB Army” community has been itching its hind legs excitedly for months over this, with many expecting the upgrade to send the token soaring once again. As hopium-filled as that might be, history tells us that when SHIB runs, it tends to run hard. (Its comedowns ain’t pretty, though.)
In an attempt to temper the usual moon-lambo froth, however, the Shiba Inu devs wrote:
“Patience is key, and some see Shibarium as a price-pumping tool, but that is not the project’s focus and never has been.”
In the blog post the team also explained that the project will be a gradual release, and that Shibarium’s native token, which is called BONE (+53% over 14 days), will be used to “pay for gas transactions and reward validators and delegators within the Shibarium protocol”.
They also reminded that there is a total supply of 250 million BONE, with 20 million “reserved to reward validators and delegators in the coming years”, and that they are moving ahead with an intrinsic “burn mechanism” of the SHIB coin.
The latter is especially welcome news for SHIB holders as it means that when the network is used, a small portion of SHIB is burned, which creates a deflationary effect designed to help increase the token’s price. In theory.
eToro’s crypto and markets analyst Simon Peters gave us a few thoughts via email this morning on the upcoming upgrade.
“The most important aspect of Shibarium is to allow greater scalability and faster transactions for SHIB tokens,” wrote the analyst. “It also increases the use cases for developers such as NFTs and the provision of transaction fees to counteract spikes in the gas costs on the network.
Aside from noting Shibariums’s designed benefits, though, Peters added:
“Introducing a layer 2 chain to a cryptoasset’s ecosystem can be a controversial development.
“Typically it is done when the original chain suffers from certain issues, such as slow transaction times, and requires developers to build another network on top of the original to improve functions and performance.”