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Shibarium: Shiba Inu's Layer 2 Blockchain Ecosystem and Tokens

4.4 | by Josiah Makori

Key Takeaways

  • Shibarium is a Layer 2 scaling solution by Ryoshi, the Shiba Inu token creator. 

  • Upon launch, Shibarium is expected to transform and improve the investor experience in the Shiba ecosystem – increase transaction speed, and lower costs. 

  • Shibarium will feature a SHIB burning mechanism and could also act as a bridge for other blockchains.

  • Shibarium aims to offer the building blocks for the Shiba Inu ecosystem, complete with a metaverse, a decentralized exchange, and blockchain games.  

  • Shibarium officially went live on August 16 2023.


What is Shibarium Shib

Since Dogecoin (DOGE) captured the crypto community's attention and found its way into the top 10 cryptocurrencies by market cap, many dog-themed projects have endeavored to repeat its success. DOGE and Shiba Inu (SHIB) started as simple meme coins. But SHIB developers have since changed their focus to make SHIB a meme token with the real utility to draw the attention of more investors. The project is on the way to positioning itself as a value-based, multifaceted ecosystem with the impending release of Shibarium.

This article covers the Shiba Inu ecosystem and explores the Shibarium Layer 2 (L2) solution. Since it's yet to launch, we will look at the latest Shibarium news, what Shibarium will offer, tokens in the Shiba ecosystem, Shiba Eternity, and the Shibaswap DEX.  

Shibarium officially went live on August 16 2023.

What is Shibarium and How Will It Work?

After launching successfully and establishing huge and loyal support in the form of ShibArmy, SHIB's founder, Ryoshi, is focused on stretching its value beyond just a meme token. Often labeled the "Dogecoin killer," SHIB is the utility token of Shibaswap, a decentralized exchange (DEX) built on the Ethereum network. In 2021, Ryoshi publicized Shiba's lineup for the Shibarium blockchain, including integrating a new Shiba stablecoin, SHI.    

Shibarium is an L2 scaling solution designed to optimize the Ethereum blockchain. To better understand what Shibarium is, we need to dig a little into what an L2 solution is. Vitalik Buterin, the co-founder of Ethereum, suggests that, in the blockchain trilemma, you must sacrifice either scalability, decentralization, or security to have the other two, and L2s work to solve the problem by transaction scaling. 

Take Ethereum, for example. Though it's decentralized and secure, it experiences scalability issues. This is why, during traffic peaks, such as the 2017 CryptoKitties Congestion Crisis, Ethereum lags and becomes expensive to use. Since its launch in 2021, SHIB has been operating on the Ethereum blockchain; hence, it is experiencing Ethereum woes.      

An L2 solution improves scalability without hindering the other two elements of the blockchain trilemma. You can think of it as a flyover built across a busy highway. It minimizes the time spent and the cost of transacting on the main chain, Ethereum. Importantly, it enables more throughput (traffic) to flow. Shibarium will strive to be that flyover for its users, improving the efficiency of the secure Ethereum network for its users. 

Shibarium's Consensus Mechanism

Transactions on Shibarium will be verified and validated through Proof of Participation, where validators are selected and receive rewards in proportion to their holdings of the associated cryptocurrency. In Shibarium's case, during the testnet phase,100 validators were chosen through a voting process. These validators contribute to operability security by staking a minimum of 10,000 BONE tokens and running a node, and delegators, who want to support Shibarium but do not want to run a full node. Delegators can lend their tokens to and vote for the validator nodes that will support the network, and in turn, earn a commission rate from the validators they've voted for. In return for their efforts, validators will receive rewards proportional to their stake, and delegtors will earn a share of these rewards 

In return for their efforts, validators will receive rewards proportional to their stake. For individuals who want to support Shibarium but are unable (or do not want) to run a full node, they can participate as delegators. This lets them vote for which validator nodes will secure the network, and earn a share of the rewards earned by 

What Shibarium Will Offer

Although the Shiba Inu developers haven't provided many details about Shibarium, this is what we know of the main promises of Shibarium:

Minimal Gas Fees

When Shiba Inu released its non-fungible token (NFT) collection, the transaction costs increased to $800. This means even if the NFTs were free to mint, you would still spend $800 to own them, establishing a significant setback to adoption that needed to be solved. Luckily, the exorbitant gas fees inspired the Shiba Inu developers to devise a lasting solution for their community.  

High Throughput 

One of the contributing factors to the high gas fees often experienced in the Ethereum network is the limited number of transactions it processes per second. Currently, the network boasts an average of 15 transactions per second (TPS). In contrast, Ethereum L2 solutions, like Polygon, boast up to thousands of TPS.   

Token Utility

Another important benefit of Shibarium is that it will include SHIB burning mechanisms, according to the sneak peeks, as the high supply of SHIB tokens is a major hindrance to its transformation into a utility asset. Since its launch, more than 40% of SHIB tokens have been removed from circulation, but the number of circulating tokens still needs to be lowered. 

DApp Accelerator 

The other advantage of Shibarium is its role in developing decentralized applications (dApps). dApps are one of the core elements of decentralized finance (DeFi), and Shiba Inu wants to accelerate their creation and deployment. 

The Shibarium Ecosystem

With the launch of Shibarium public beta testnet, PUPPYNET, anyone can now build on Shibarium. For users and projects that are keen to contribute to Shibarium, the team has set up a range of opportunities, ranging from becoming a validator to bringing their projects onto the Shibarium network. There has also been an announcement from Atomic Wallet that they will be supporting Shibarium.

Metaverse and Gaming

Shibarium aims to be an ecosystem where future Shiba Inu projects will launch. Examples of such projects include the SHIB: The Metaverse and a blockchain version of the Shiba Eternity game. These projects have already captivated the ShibArmy and will be released after the launch of Shibarium. The team has also revealed an Early Alpha experience of WAGMI TEMPLE at their SHIB: The Metaverse booth for media and the community at SXSW.

SHIB: The Metaverse will also have the added feature of adding utility to SHIB, which will be used to customize your land plot, buring SHIB each time. However, for users to buy land, they will need to transact in ETH while locking up their LEASH tokens or Shiboshis. 

Coins in the Shiba Inu Ecosystem

For Shibarium to achieve its objectives, it will involve five utility tokens, SHIB, BONE, LEASH, TREAT, and SHI. Each offers different ways for investors to grow their return on investment. Investors can leverage Shibaswap, the ecosystem's native DEX, to swap tokens, participate in governance, generate passive income and buy NFTs.  

SHIB: The Native Token of the Shiba Inu Ecosystem

What is Shib

While BONE is Shibarium's preferred utility token, SHIB stands tall as the native token of the Shiba Inu ecosystem. Unlike most other digital currencies, SHIB's high supply enables investors to own trillions of tokens. It has a total supply of 1 quadrillion and a circulating supply of 589 trillion.   

SHIB launched in August 2020 and was hyped as the "Dogecoin killer." While it has experienced tremendous growth in its value, SHIB prices are still far from one US cent. But the introduction of Shibarium promises to turn SHIB from a meme token to a utility-based token and attract more investors.  

At press time, there was no official communication that Shibarium would accelerate SHIB's burn rate. However, SHIB investors are still speculating on the possibility. From the sneak peeks, Shibarium will likely have an inbuilt mechanism that lets holders burn tokens and eliminate them from circulation. 

Token burning involves sending them to a wallet that accepts tokens but can't release them, eliminating access to them forever. Due to the laws of supply and demand, burning seems to boost the value of assets – the reason why some crypto projects (including Binance) have been using this method. Besides, Shibarium will likely charge users a small transaction fee and use a portion of the fee to burn SHIB.  

BONE: The Shibarium Coin

What is BONE

 

On December 30, 2021, Shiba Inu developers confirmed that Shibarium users would pay gas in BONE tokens. So, what makes BONE the best choice? Well, there are several reasons. First, BONE's maximum cap is high enough to let Shibarium users buy adequate amounts while supporting liquidity but low enough to prevent it from requiring intense price management. 

While LEASH's price reached an all-time high of above $4,000 in 2021, SHIB’s value is yet to reach one penny. BONE seems the perfect fit as its price nears $1. Besides, its supply is more capped than SHIB's, but substantially less limited than LEASH's. Its role as a utility token makes it an ideal choice, too. Since utility tokens are often used to raise funds for projects, the holders would likely want to participate in shaping the future of the project. 

Of the total supply of 250 million, 20 million BONE tokens have been reserved to reward validators and delegators in the coming years. 

BONE also acts as ShibaSwap's governance token, implying holders can participate in shaping the future of the Shiba Inu ecosystem. Besides, developers are paid in BONE tokens. It has a maximum supply of 250 million and a circulating supply of almost 230 million. When you bury BONE tokens, you get tBONE, which gives you access to a liquidity pool that offers 1% rewards of all the BONE per block. Besides, when you dig into providing liquidity with BONE tokens, you receive a portion of BONE-ETH SSLP. 

Doge Killer (LEASH): First Access to Shiba Inu Metaverse Lands

What is Leash  

Ryoshi, the anonymous SHIB creator, is the creator of LEASH. He introduced it as a rebase token – a crypto with a flexible supply, which could regulate its price through demand. Rebase token holders sometimes experience changes in the number of coins in their wallets, but their total value remains constant. 

However, Ryoshi and the Shiba Inu developers abandoned this plan and decided to "unleash the full potential" of LEASH. They capped the maximum supply of LEASH to 107,647 tokens, which is relatively low compared to SHIB's supply, which runs to quadrillions. These low numbers, coupled with the increase in interest, is likely why LEASH has a high price of about $324 as of December 08, 2022. 

When you stake or bury the LEASH tokens, you are rewarded with xLEASH tokens. By holding xLEASH, you qualify to join the xLEASH liquidity pool, where you receive 0.5% of all BONE per block. Besides, when digging or offering liquidity with LEASH tokens, you receive a portion of the LEASH-ETH SSLP.   

If you hold LEASH, you'll be the first to gain access to the Shiba Inu metaverse's Shiba Lands. Just like other metaverse platforms that feature virtual real estate, like Sandbox and Decentraland, the "lands" in Shiba Inu's metaverse will be put up for purchase and auction. The team will be adopting a queue system for the first selling phase to prevent bots and gas wars while also requiring interested parties to hold LEASH. 

SHI: An Upcoming Stablecoin

SHI is an upcoming stablecoin that will run on Ethereum and Shibarium. It aims to become a universal store of value, unit of account, and exchange medium. Almost all stablecoins are pegged to $1. However, SHI will be pegged to $0.01 to ensure it is easily accessible to all classes of people worldwide, with the plan to enable goods and services payments globally. 

TREAT: Coming Soon

As the term suggests, TREAT is a reward asset for Shiba Inu investors. The token obtains the rewards from the Shiba Inu metaverse and Collectible Card Game. Additionally, TREAT is meant to bring balance to the SHI stablecoin. 

Shiba Eternity

Shiba Eternity is a play-to-earn (P2E) mobile card game with a Shiba Inu theme. It was created in partnership with PlaySide Studios. Its mechanics requires two participants to play against each other. Each participant aims to defeat their opponents by taking all points from them. You can utilize spells, cards, and other tools to defeat your opponent and earn rewards. 

It's also important to note that the game is free to download and play. All new participants receive starter decks. In the first phase, you will meet Ryoshi, a Shiboshi who will help you maneuver through the game. Thanks to tutorial-based guides, newbies can quickly learn the game's mechanics.  

Shibaswap DEX

Shibaswap is a native DEX for the Shiba Inu ecosystem. It brings a Uniswap-like experience to the ecosystem – facilitating non-custodial crypto swaps and liquidity provision. Besides, it offers extra features like staking, governance, and a Shiboshi social club – a community for Shiboshi NFT owners. To use Shibaswap, you connect your web3 wallet and start using your favorite feature. 

Currently, there are four ways of generating passive income in ShibaSwap DEX:

Dig: Users who deposit SHIB tokens in the Dig poll earn free BONE tokens. The amount you earn is based on the number of tokens you have deposited in the pool.

Woof: This yield farm pool lets you swap your BONE rewards with SSLP tokens. 33% of the rewards are immediately available for use, but the rest are locked for six months. 

Bury: To generate interest, you can stake your SHIB, LEASH, or BONE tokens in the Bury tool. The interest is paid in the form of xSHIB, xLEASH, or tBONE, based on the asset you stake. You can withdraw 33% of the returns weekly and the rest after six months. 

Burn Portal: This Shibaswap feature rewards users for burning SHIB tokens. The feature lets you deposit SHIB tokens to a dead wallet and rewards you with Ryoshi tokens. 

To learn more about Shibaswap, check out our article on Shibaswap.

Conclusion

While most crypto users know SHIB has a meme token, it is expanding beyond its first reputation, with a growing ecosystem featuring a DEX, NFT, and a game that takes inspiration from Shiba Inu. With the looming launch of Shibarium, a Layer 2 solution that will support faster transactions and lower gas fees, SHIB is determined to become a complete ecosystem with a metaverse and blockchain games. Besides, it also has grown to include tokens like LEASH, BONE, TREAT, and SHI, which serve various purposes in the ecosystem. 

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Josiah Makori
Josiah Makori

Josiah is a tech evangelist passionate about helping the world understand Blockchain, Crypto, NFT, DeFi, Tokenization, Fintech, and Web3 concepts. His hobbies are listening to music and playing football. Follow the author on Twitter @TechWriting001

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