Learn: What is Shibarium, and what does it mean for Shiba Inu?
Shibarium is an upcoming layer-2 (L2) blockchain network built on Ethereum for Shiba Inu. It will transform Shiba Inu, a memecoin, into a complete ecosystem.
Ryoshi, the anonymous creator of Shiba Inu, proposed the Shibarium project in a now-deleted blog post in May 2021. The project intends to build a blockchain layer-2 solution on the Ethereum blockchain. The expansion will transform Shiba Inu from a memecoin into a comprehensive ecosystem that includes a decentralized exchange (DEX), a metaverse and blockchain games, such as Shiba Eternity.
Memecoins are cryptocurrency tokens depicted with comical or animated internet memes. Generally highly volatile, these coins are largely driven by pop culture and have an ample supply leading to high inflation. Shiba Inu (SHIB) itself has a total supply of 1 quadrillion, which equals 1,000 trillion. The Shibarium portal is aimed at reorganizing Shiba Inu as a multi-project and a stable ecosystem.
Shibarium developers haven’t yet released a launch date for the project. An alpha preview of SHIB metaverse, a part of the project, however, was on display at SXSW 2023 from March 13 to 15. The release was originally planned for February 2023 but was delayed because the developers were keen on launching an error-free version after thorough testing through various phases.
The advantages of using Shibarium include higher transaction speeds, lower fees, increased token utility and seamless decentralized application (DApp) development.
Despite its upgrade to a proof-of-stake (PoS) blockchain through the Merge, the Ethereum blockchain still struggled with scalability, despite its robust security layer. Shibarium is also a PoS project, which will help Shiba Inu to scale while keeping it hooked to Ethereum blockchain. Shibarium is expected to stabilize the value of SHIB and transform Shiba Inu into a value-added project with long-term prospects.
Let us see below how Shibarium will unlock the potential infused in the memecoin.
Adding layer 2 to the Shiba Inu ecosystem, Shibarium will increase throughput, enabling the project to handle significant growth. Shibarium is expected to boost the transaction speed considerably, though users will have to wait a bit more for precise information on throughput.
High transaction fees have been a problem for anyone performing a transaction on Ethereum. Sometimes, the fee is higher than the transaction amount. For instance, one might need to pay a steep fee of $50 worth of Ether (ETH) for a small transaction of $10 in value. The introduction of the Shibarium layer-2 solution is likely to make gas fees negligible.
Contrary to being a mere memecoin, the Shibarium ecosystem will be comprehensive, comprising several projects, including SHIB metaverse, ShibaSwap DEX and blockchain games. The metaverse and games are expected to pull in users, while the DEX will provide better liquidity.
The abundant supply of SHIB, despite the burning of more than 40% of the tokens, has been a huge hindrance to its growth. Shibarium handles this by introducing BONE as the native coin. When Shibarium takes off, validators on the network will get paid in BONE for securing and validating transactions. Moreover, in the new ecosystem, every transaction will consume SHIB, a mechanism to control the hugely inflated supply of SHIB.
DApps are decentralized applications with backend code executing on a decentralized peer-to-peer (P2P) network. The memecoin, however, simply did not have the wherewithal to act as a native coin of DApps. Shibarium intends to develop a robust ecosystem comprising a layer-2 solution in conjunction with Ethereum. It will provide the technical ability to create DApps within the ecosystem.
Shibarium will take away a large chunk of transactions off of the Ethereum blockchain, resulting in quicker throughput without compromising on security. The mechanism to burn tokens will help keep inflation in check.
The upcoming Shibarium will function by handling transactions while retaining the security layer of Ethereum. As most network activities are handled by Shibarium itself, Ethereum will be relieved of the sheer volume of transactions that might swamp it. This will result in faster yet secure transactions.
Before adopting PoS, the low throughput of Ethereum resulted in network congestion and pushed up gas fees to an astronomical $50–$80 per transaction. The Merge boosted the throughput of the network and brought down fees. Still, L2 solutions are required, as the base blockchain has to handle a stream of projects that slows it down.
To stem the inflation of the SHIB coin and set its prices in an upward motion, the Shibarium portal will have a mechanism to burn SHIB tokens paid as fees for executing transactions. This will bring down the coins in circulation and stabilize the price of tokens.
Coin burning is a mechanism to send tokens to one-way wallets that accept the tokens but never release them. These coins are lost forever. Over time, the continual burning of coins keeps inflation at bay in cryptocurrency projects.
The metaverse and DEX in the upcoming Shibarium ecosystem will have several use cases that will give users a reason to hop on the network.
The SHIB metaverse is an immersive, 3D virtual space, featuring 11 hubs, all with different features. The Alpha Preview version of the metaverse was on display at SXSW 2023 from March 13 to 15, presenting a glimpse of WAGMI Hub, the first of these hubs, focused on health and wellness.
In the metaverse hubs, users get to benefit from a string of use cases, such as building digital businesses, bringing in real-life businesses, developing commercial and residential structures, playing innovative games and even decentralized finance (DeFi) platforms. The metaverse will have a total of 100,595 land plots that will be unlocked over time.
To participate in the land bid and purchase process, users could use the MetaMask wallet. Bids and purchases need to be made with ETH. Users will find a virtual venue in the hubs to explore, discover, trade, sell and buy items. The team hopes to offer the community, termed ShibArmy, a dynamic world that rewards their participation.