Would Shiba Inu coin turn out to be the next Dogecoin? Read this article to know everything you need to know.
Shiba Inu is a token based on the Ethereum blockchain, founded by “Ryoshi”. Similar to Satoshi Nakamoto, his real identity is also unknown. This meme coin is considered an experiment in decentralized spontaneous community building as per the whitepaper, dubbed as “woof paper” by creators.
The “woof paper” lists international chat rooms, social media influencers and meme-makers as a part of the community behind this token. To know the best time for breakouts of such coins, one should follow hashes on Reddit and Twitter.
Dogecoin vs Shiba Inu
Dogecoin was founded in 2013 and had the first-mover advantage in memecoin. Shiba Inu came into existence in 2020 and is very recent and new. Dogecoin has an unlimited supply, whereas Shiba Inu has 1 quadrillion units.
Dogecoin has been developed using similar technology as Bitcoin. Ethereum powers Shiba Inu tokens.
Pros of Shiba Inu Coin
One may see meme coins as nothing more than a joke, but it has acted as the first step for many crypto traders because of its high volatility. Once they enter the market, these traders are likely to invest in other projects.
Shiba Inu Coin is a Mid-Cap Asset: As of 11th July 2021, SHIB has a market capitalization of $3,002,606,346. According to the categorization of assets, from $300 million to $2 billion is small-cap, $2 billion to $10 billion is medium-cap, and more than $10 billion is large-cap. Its current supply in market is 394,796,000,000,000 SHIB coins
Shiba Inu is a step ahead of dogecoin and baby dogecoin after they launched a dex called ShibaSwap. It is Shiba Inu’s decentralized cryptocurrency exchange, allowing traders to exchange Shiba Inu for other cryptocurrencies. The supporters describe it as a “safe place to exchange your valuable crypto while staying decentralized.” Participants in the network will exchange their tokens directly from their wallets with other ERC-20 compatible tokens on this non-custodial platform.
Risks of Shiba Inu Coin
Investors should have a high-risk tolerance. Cryptocurrencies are a risky asset class; some altcoins like Dogecoin or Shiba Inu coin carry greater risk. Dogecoin’s recent dip due to Elon Musk tweet is an excellent example of these assets’ high volatility. Many financial analysts believe that these meme tokens won’t last long, and investors might see sudden losses.
For instance, Shiba Inu coin prices dropped by around 40% after Vitalik Buterin donated 50 trillion Shiba Inu coins to the India Covid Crypto Relief Fund, a fund run by Sandeep Nailwal.
The Unanticipated Holdings of SHIB: 50% of the coins has been locked as liquidity to Uniswap. However, the other half distribution is interesting as the team behind SHIB has sent 500 trillion coins to the co-founder of Ethereum, Vitalik Buterin. Also, two other wallets save 10% of the supply collectively, presenting a severe risk of price crashes if they decide to sell their holdings. In any case, the collection of the token remains seriously concentrated.
The most critical risk in investing in any cryptocurrency is that neither are regulated by RBI nor have a statutory authority to oversee/ supervise their operations. The central bank has issued warnings for crypto traders of possible losses due to adverse developments.
How can Investors decide?
Before investing, the investor/ trader should conduct in-depth research and invest if they firmly believe it has value. This research includes reading whitepapers and checking coin supply and holdings, and knowing the management team behind it. This is the same for all kinds of investments.
It’s to be noted that the entire Shiba Inu ecosystem consists of 3 tokens – SHIB, LEASH, and BONE. Once Shiba Swap is ready, users will be able to hold these tokens and earn rewards. For holding SHIB, users receive xSHIB, for holding LEASH – xLEASH and BONE – tBone.
Per the white paper, there are incentives for xLEASH and tBONE holders as well.
The most crucial point that should be noted before investing money into the cryptocurrency is that one should be satisfied of their research and studies and never buy or invest money into the coin because of someone else’s advice. One should not just invest either for fear of missing out or with the fascination of becoming rich quickly. One should only invest when one believes that it will be successful in the long run. It is aptly said that in the long run, time beats the timing in the market.
Where can I buy the Shiba Inu coin?
One can trade the Shiba Inu coin at WazirX, Uniswap and the web version of CoinDCX. Uniswap is a decentralized trade (DEX) on the Ethereum blockchain that allows trading cryptocurrencies for Ethereum-based tokens. However, it is pertinent to note that these coins cannot be purchased in Indian rupees (INR) but only in USDT/BUSD.