After the meteoric rise of Gamestop, Dogecoin and other speculative assets, new crypto projects have been trying to capitalize on the trend.
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One newer token called Shiba Inu, named after the dog representing Dogecoin, has dubbed itself the “Dogecoin killer.” But is Shib a legitimate project, or is it just another altcoin looking to take advantage of trends and unsuspecting investors?
Fast Facts:
- Shiba Inu is an ERC-20 altcoin created on the Ethereum blockchain.
- The coin was created by an anonymous individual going by the name Ryoshi and dubbed the “Dogecoin Killer”.
- There are almost 400 trillion SHIB tokens in circulation, with a max supply of one quadrillion tokens.
- The Shiba Inu creators have created an ecosystem of three coins known as SHIB, LEASH and BONE and a decentralized exchange called ShibaSwap.
- Ryoshi sent Vitalik Buterin, the creator of Ethereum, half of the supply of the token.
- Buterin donated and burned all of his holdings in early May, tanking the price.
- The SHIB whitepaper was updated after Buterin’s donations saying that they were good for the coin and that Buterin is a “friend of SHIB.”
- Some SHIB investors were misled to believe that Buterin was an investor in the project.
- ShibaSwap has received an audit that revealed centralization risks where a developer had the authority to “withdraw all the ERC20 token boneToken to any arbitrary address” that they wished.
What is Suba Inu?
Shiba Inu is an ERC-20 token created on Ethereum by an anonymous individual known as Ryoshi. Shiba Inu’s website says that the coin is a decentralized meme token that is growing into a vibrant ecosystem.
“SHIB is an experiment in decentralized spontaneous community building. SHIB token is our first token and allows users to hold Billions or even Trillions of them. Nicknamed the DOGECOIN KILLER, this ERC-20 ONLY token can remain well under a penny and still outpace Dogecoin in a small amount of time (relatively speaking).”
The token’s whitepaper says that the intention is to build an ecosystem consisting of three tokens with different supplies.
SHIB is the ecosystem’s foundational currency with a max supply of one quadrillion. LEASH is the second token created and has a supply of 107,646 tokens and the third token is BONE with a supply of 250,000,000 tokens.
The team behind the tokens has also created a decentralized exchange known as ShibaSwap, that allows users to “dig” (provide liquidity), “bury” (stake coins), “fetch” (retrieve tokens from Uniswap or SushiSwap) and swap coins. This exchange is similar to others on the Ethereum network, like SushiSwap and Uniswap.
Shiba Inu vs. Dogecoin
Dog-themed cryptos have been coming out of the woodwork in the last year. This has largely been facilitated by meme culture and Elon Musk’s Twitter feed.
Baby Doge, doo, doo, doo, doo, doo,
Baby Doge, doo, doo, doo, doo, doo,
Baby Doge, doo, doo, doo, doo, doo,
Baby Doge— Elon Musk (@elonmusk) July 1, 2021
But what is the difference between the classic initial meme crypto, Dogecoin, and the new “dogecoin killer,” Shiba Inu?
Dogecoin
Dogecoin is a cryptocurrency that was built as a parody of the ICO (initial coin offering) market during the 2017 crypto bull run. It was a joke meant to make fun of all the ridiculous and fake scam coins releasing at the time and made use of the massively popular “doge” meme for its name.
Dogecoin was built with code from a fork of Bitcoin known as Litecoin, meaning it also uses the proof-of-work consensus mechanism. Unlike Litecoin, however, Dogecoin was not given a maximum supply.
Dogecoin blocks are found every minute and 10,000 new Doge are rewarded to miners per block. This means that 14.4 million new Doge are created a day.
Shiba Inu
Harping on Dogecoin’s meme culture appeal, Shiba Inu calls itself a “decentralized meme token that evolved into a vibrant ecosystem.” It also calls itself the “Dogecoin killer,” but how does it actually differ from Dogecoin?
Shiba Inu is an ERC-20 token on the Ethereum blockchain. This means that it has been created and is hosted on Ethereum’s blockchain instead of having its own. Dogecoin on the other hand has its own blockchain. ERC-20 tokens are stored and sent using Ethereum addresses.
What really sets Shiba Inu apart from Dogecoin is its ShibaSwap decentralized exchange. This makes Shiba part of the decentralized financial ecosystem on Ethereum and allows its users to get certain functionalities, like swapping tokens, staking and gaining yield, that Dogecoin does not allow.
An audit of ShibaSwap produced a number of “major findings,” including major centralization and privilege risks where a developer had the authority to “withdraw all the ERC20 token boneToken to any arbitrary address” that they wished. More importantly, if this person were to be hacked, all tokens could be lost.
These issues have since been resolved, but ShibaSwap has only been audited once and it’s impossible to know whether or not the team keeps the changes they have shown the auditor.
Is Shiba Inu Coin a Safe Investment?
Perhaps the most telling aspect of the coin’s legitimacy can be found in its whitepaper, or different versions of its whitepaper as it has been edited since launch. When Ryoshi created Shiba Inu, they sent half of the supply to Vitalik Buterin, the creator of Ethereum.
The whitepaper has a quote from Ryoshi saying “We sent 50% of the total supply to Vitalik. There is no greatness without a vulnerable point and as long as VB (Vitalik Buterin) doesn’t rug us, then SHIBA will grow and survive.”
But on May 12th Buterin gave away 50 trillion SHIB, worth $1 billion at the time, to charities and then burned 90% of the remaining coins he held. The final 10% he said he would also donate to another worthy charity.
Buterin added a note to his transaction warning that anyone making new coins should never give him coins without his consent.
“For anyone making coins (or daos, or whatever else) in the future, PLEASE DO NOT GIVE ME COINS OR POWER IN YOUR PROJECT WITHOUT MY CONSENT! I don’t *want* to be a locus of power of that kind. Better to just print the coins into the hands of a worthy charity directly (though do talk to them first).”
The price of SHIB tanked on the news of Buterin giving all his tokens away. The community either assumed that Buterin was intentionally invested or that Buterin was involved simply because he owned so much of the token.
A new version of the white paper was published with a new section titled “Vitalik Buterin, Friend of SHIB.” The first sentence of this section calls Ryoshi a visionary and that Buterin is a visionary like him. It then goes on to misspell Ethereum as Etherium.
“Like Ryoshi, the creator of Shib, Vitalik Buterin is a visionary. One of the youngest billionaires in history, VB is the 27-year-old creator of Etherium and, until recently, held half of the total supply of SHIB.”
The new section categorizes what happened with Buterin’s donations as its biggest strength and totally brushes over the fact that SHIB has lost nearly 82% of its value since the donations and burns were made.
A number of things give off major red flags when looking at SHIB as an investment opportunity. The first is the audit results and the fact that one developer had the privilege and permissions to simply withdraw user tokens on ShibaSwap to some arbitrary address. While these issues were allegedly resolved, the exchange has only had one audit.
The next red flag is the fact that the creator even sent coins to Buterin in the first place. It’s near impossible to know the creator’s real intent, but it comes off as a marketing move. There were many posts in the Shib Reddit community about the fact that Buterin owned the token and that he was an investor which further boosted people’s hopes.
Many examples of such Reddit posts exclaim that Buterin owned SHIB and that the coin was going to the moon.
This issue is further compounded by the insistence in the new version of the whitepaper that Buterin is a friend of the project when it is clear he has nothing to do with it. And Ryoshi calling Vitalik Buterin a visionary like himself doesn’t exactly give off the vibe of credibility.
As with most cryptocurrencies, a level of speculation is required to make an investment. While SHIB has gained mass attention in the last year due to meme culture, it’s tough to apply any value from an investment point of view.
The major concerns regarding SHIB come from its creator’s actions. Sending half the supply to Buterin then changing the whitepaper after the donations and burn seems disingenuous. Calling Buterin a “friend if SHIB” is also a very large stretch, if not totally false.
And while SHIB does have its own small ecosystem with a decentralized exchange, it’s unclear how safe it is to use compared to others like Uniswap that have been through far more audits. In the end, buying SHIB is like buying one of the 11,000+ altcoin lottery tickets.
This news is republished from another source. You can check the original article here.
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