2021 has been the year of meme investing. Retail investors have leveraged social media to whip up a frenzy for specific stocks and cryptocurrencies. We’ve seen this play out in companies like AMC and Gamestop, while crypto investors have latched onto Dogecoin.
Now, the popularity of these meme-worthy assets is inspiring some developers to create tokens that are variations of popular online memes. Altogether, crypto meme tokens are collectively worth $43 billion – an industry larger than most high-profile tech stocks like Twitter or Etsy.
Here’s a closer look at the second-most popular meme token – Shiba Inu.
Shiba Inu was created in August 2020. Its pseudonymous developer “Ryoshi” described the token as a “Dogecoin killer” and positioned the asset as the next big meme. The Shiba Inu breed of canines was picked to represent the token simply because it was the breed of the dog on the Dogecoin symbol.
With that simple idea, the developers launched the token to a community of 544,000. Since then, the project seems to have achieved some of its objectives by wresting away market share from Dogecoin. The community has expanded to roughly 621,300. The token has jumped 3million% in a matter of months, reaching an all-time high of $0.000088.
It’s aggregate market cap is now $18.3 billion, second only to Dogecoin in the meme category.
As with most meme coins, Shiba Inu doesn’t have any intrinsic utility. The whitepaper does make several references to overtaking Dogecoin’s market value as a primary goal.
However, the development team argues that funds raised from the project have helped develop a decentralized exchange called ShibaSwap.
Modelled after SushiSwap, ShibaSwap is meant to facilitate trades of digital assets without an intermediary. $SHIB is supposed to serve as one of the native tokens of this ecosystem, facilitating trades, governance and fee payments.
Ryoshi initially issued a quadrillion SHIB to fund the system. Roughly half of these tokens (45%) were instantly gifted to Ethereum founder Vitalik Buterin. The other half are held on SushiSwap. Buterin donated his airdrop to a COVID relief fund in India. AT the time, his donation was worth roughly $1 billion.
To support the ShibaSwap DEX and the ecosystem, the developers have launched secondary tokens such as $BONE, $LEASH $TREES to serve as staking coins and liquidity providers.
Critics have described the project as a pump-and-dump. Unlike Dogecoin, investors in Shiba Inu do not know who the developers are. As such, the community lacks the same transparency and authenticity that attracts investors to Dogecoin.
Nevertheless, all meme coins have lost value in recent weeks, with Dogecoin losing 76% of its value from all-time highs and Shiba Inu losing 61% from its top tick. Traders in these meme coins should be aware of the risks and volatility.