What Is Shibarium Ecosystem & What’s the Impact on Shiba Inu?

The world of cryptocurrencies is a place where incredible things happen all the time. On the one hand, there are financial and technological experts who want to create an alternative monetary system. On the other end, there are entire communities that want to have fun as much as they want to profit, so they create tokens like Shiba Inu and ecosystems like Shibarium.

But Shiba Inu stopped being a meme coin years ago. What began as sort of a joke, emerging from the shadow of yet another dog-themed cryptocurrency, DogeCoin, quickly turned into something much greater.

Today, Shiba Inu has millions of dedicated users, and with the development and launch of Shibarium, this crypto is likely to keep growing. So, let’s find out precisely what Shibarium is and how it aims to assist the world’s largest altcoin network—Ethereum.

What Is Shibarium?

Shibarium is a Layer 2 (L2) scaling solution blockchain for the Ethereum network. It’s built for the Shiba Inu (SHIB) ecosystem but with the purpose of resolving some of the big issues that exist on Ethereum, such as high transaction fees and slow speeds during times of congestion.

The SHIB token first appeared as a meme during the 2020 bull run. It wasn't the only cryptocurrency with an animal theme trying to cash in on the success of DogeCoin (which was well-known for endorsements from notable figures like Elon Musk).

However, SHIB has quickly proven that it is here to stay, garnering a massive following of crypto traders and investors. As its popularity grew, the demand for the underlying infrastructure that could support it increased. That’s where Shibarium came into play.

The name “Shibarium” is a wordplay designed to combine the name of the Shiba Inu token with the “-reum” suffix in Ethereum. The project was first introduced back in 2021 by SHIB's creator, known for his pseudonym, Ryoshi.

Like many other blockchain developers, Ryoshi was looking for ways to solve Ethereum’s scalability issues. As a Layer 2 scaling solution, Shibarium is designed to help SHIB holders send and receive their tokens faster and cheaper without incurring potentially high fees in ETH.

Designing and launching the L2 network was the final step in the transformation of SHIB into a serious contender in the crypto space. Shibarium added plenty of utility to Shiba Inu while introducing additional tokens to support its operations.

The end result is a thriving DeFi ecosystem that features everything from decentralized exchanges and blockchain games to staking, burning, and the metaverse. It stands as a testament to the power of the community and how innovation is vital in the ever-changing realm of cryptocurrencies.

How Does Shibarium Work?

Shibarium works similarly to many other Ethereum Layer 2 scaling solutions—it speeds up transactions while lowering the associated costs and fees.

One of the vital elements that helps Shibarium achieve this is rollups. Rollups are protocols specifically designed to bundle (or roll up) multiple transactions into one. After that’s been done, a single transaction is sent back to the Ethereum network for processing.

Creating these batches of transactions involves off-chain processing. Simply put, the Shibarium network does the heavy lifting to process all these transactions without burdening the Ethereum blockchain. It processes them individually and only submits them back to the main network as a single transaction.

Like Ethereum, Shibarium uses the proof-of-stake consensus mechanism. Its operations depend on validators and delegators to run properly. Validators are the key players since they are the ones running nodes and creating new blocks out of processed transactions. Delegators simply submit their tokens for staking to support validators’ operations.

Because of that, the two blockchains can achieve seamless interoperability. That’s the case, even though the network ran into serious issues at first. After a successful Shibarium beta launch of the Puppynet on March 11, 2023, the mainnet saw a massive surge in users, which eventually overwhelmed the system.

Shibarium's release date was August 16, 2023, and soon after, almost 954 ETH and $750,000 worth of BONE tokens ended up stuck in frozen transactions. These issues arose due to the sheer volume of transactions.

In the first 30 minutes after the launch, Shibarium experienced more than 160 million compute units. That put it on track to rival some of the biggest L2 blockchains in the crypto sphere. Fortunately, the problems were promptly resolved, and contrary to the FUD spread by some users on social media, no ETH or BONE tokens were lost.

4 Benefits of Shibarium

Shibarium was created to improve the Ethereum ecosystem, so let’s explore some of its key benefits.

#1. Faster Transactions

By using rollups and processing transactions away from the main network, Shibarium can see massively increased throughput. The speed doesn’t only improve network efficiency—it also positively impacts the user experience.

Faster transactions are especially important for cryptocurrencies looking to achieve wider mainstream adoption. Many users who aren’t versed in the cryptosphere are used to the instantaneous real-time interactions of Web2, which is what Shibarium can provide them in a Web3 environment.

#2. Reduced Costs

Ethereum is notorious for its high gas fees during periods of extreme congestion. It’s not uncommon for fees to be greater than the value of the crypto being transferred. The highest recorded gas price was in May 2022, at $196,683.

Prohibitive fees can price out many retail investors, which is why scaling solutions like Shibarium are invaluable. By performing off-chain computations, Shibarium can process transactions at a fraction of the cost, making gas fees all but irrelevant to the average user.

#3. Additional Token Utility

The introduction of Shibarium added much-needed utility to the SHIB token and helped transform it from a meme cryptocurrency into a potentially valuable financial instrument.

Initially, SHIB was created to have a maximum supply of 1 quadrillion tokens. Such a large number of tokens resulted in inflatory issues, which persisted even though more than 40% of tokens were burned. That’s also the main reason why SHIB was never worth more than a fraction of a cent.

Shibarium brought several new tokens to the ecosystem, each with a specific use case. For instance, BONE tokens are used for governance, while LEASH is used for staking. Moreover, Shibarium increased the burn rate of the SHIB token since it’s used to facilitate transactions. That further adds value to Shiba Inu and helps control its inflated supply.

#4. Support for dApps and Smart Contracts

Shibarium wasn’t developed only to facilitate faster and cheaper transactions. It was created as a robust system that supports smart contracts and a vast range of dApps, adding programmability and utility to the network.

ShibaSwap, for instance, represents a hard fork of SushiSwap. It’s a decentralized exchange (DEX) that offers plenty of features. Crypto enthusiasts can provide liquidity to earn BONE tokens, buy, sell, and trade NFTs, stake their tokens to earn passive income, participate in governance, and much more.

Then there’s the SHIB metaverse—a virtual 3D space intended to have various use cases, including gaming, business, and real estate. The metaverse will be split into 11 themed hubs and 100,595 plots of land that participants will be able to buy, use, and sell. The development team has already shown a preview of the first, health-focused WAGMI Hub.

There’s even a blockchain-powered video game called Shiba Eternity. Available on Google Play and App Stores, this trading card game leverages cryptocurrencies and NFTs, pulling even more users from the mainstream world toward Shibarium.

Shibarium Ecosystem Components

The key components of the Shibarium ecosystem are its tokens—BONE, SHIB, LEASH, TREAT, and SHI. Aptly named, they all have unique use cases and are designed to facilitate the workings of the entire system.

#1. BONE

Users can earn BONE (Bone ShibaSwap) tokens by using the DIG feature on ShibaSwap to provide liquidity. After connecting their wallet to the Shibarium DEX, users can create a pair of cryptocurrencies to add liquidity to and start earning rewards.

BONE tokens can then be staked to obtain tBONE (Staked Bone), which represents the governance token. The holders can participate in DOGGY DAO voting to influence the development and changes to the Shibarium ecosystem.

#2. SHIB

SHIB remains the primary Shibarium coin. It’s an ERC-20 token that was created as a joke, though it eventually overshadowed its predecessor, DogeCoin. Its primary purpose is to facilitate transactions and other Shibarium DeFi activities.

#3. LEASH

LEASH (Doge Killer) was originally envisioned to be pegged to DogeCoin and always follow its price. However, that idea was later abandoned, and LEASH is now another standalone ERC-20 token.

It has a limited supply of 107,646 tokens, which is rather small compared to SHIB’s 1 quadrillion. That ensures its scarcity, increasing demand and driving the price of a token up. Users can stake LEASH to obtain xLEASH as a reward.

#4. TREAT

TREAT (Treat Token) is one of the latest additions to the Shibarium ecosystem. The token is designed to be multifunctional, with some of its uses being:

• Liquidity provider to the SHI stablecoin
• Potential replacement of the BONE token
• Reward token in the Shibarium metaverse and card game

#5. SHI

While SHI is not yet deployed to the Shibarium network, it’s going to be a stablecoincreated to facilitate its operations. The token is often compared to PayPal's native stablecoin and is expected to be its more decentralized version, which can result in wider adoption.

The Importance of Shibarium and Implications for Shiba Inu

The importance of Shibarium and its implications for Shiba Inu can’t be understated. Its introduction was the turning point for the token.

First off, Shibarium legitimized Shiba Inu by giving it concrete value and use cases within a broader ecosystem. Essentially, it turned a meme into a token used to facilitate the functioning of an Ethereum Layer 2 scaling solution.

More than that, Shibarium created a solid foundation for future projects, all of which will likely implement the SHIB token. There is already a DEX that uses SHIB as a fee for swaps, with a metaverse and a blockchain video game in the works.

That level of development has already attracted a wider pool of investors. Faster and cheaper transactions have removed the barriers that prevented many users from taking full advantage of their SHIB holdings. The community is thriving, going so far as to compare the upcoming stablecoin to the TradFi industry giant, PayPal.

All of this has created a reinforcing feedback loop system. The increased utility and value of Shiba Inu brought by Shibarium serve as an incentive for developers to keep advancing. As they keep perfecting the network and adding more utility, we can expect even more people to join the community.

At the moment, Shiba Inu’s price has dropped more than 90% compared to its all-time high of $0.000008044 that happened on October 28th, 2021. Still, SHIB remains among the top 50 cryptocurrencies by market capitalization. Its price is likely to surge during the next bull run, maybe even surpassing the last ATH.

The Future of Shibarium

Developers’ commitment to continuous improvement and efficiency will likely result in the Shibarium ecosystem’s overall growth.

Both Shibarium and Shiba Inu can expect broader adoption going forward. With faster transaction speeds and reduced costs, crypto enthusiasts who were reluctant to pay Ethereum gas fees might now finally join the SHIB-holder community.

Here are some events that are likely to happen in the future:

• Blockchain might see integration with additional DeFi platforms
• Tokens like LEASH and TREAT might gain more utility as additional dApps get introduced to the ecosystem
• SHI stablecoin could make Shibarium a powerhouse among other Layer 2 scaling solutions
• Other crypto projects could look for partnerships with Shibarium, fostering interoperability and creating a larger, more cohesive environment
• As more active users join the community, there could be changes in governance and future development

On the other hand, the popularity of Shibarium will likely result in competitors spawning that are trying to take its place. Ultimately, the future of Shibarium is in the hands of its developers and community, and they have been steadily progressing upward so far.

Key Takeaways

That sums up today’s lesson on the magnificent world of Shibarium. We’ve learned about the transformative journey of the SHIB token and the power that a dedicated community in the crypto space has.

Shibarium ended up being much more than a scaling solution and a feature-packed DeFi ecosystem; it stands as a symbol of all the possibilities that blockchain enables. It showed how even a playful creation can turn into a serious venture when driven by diligent developers, investors, and enthusiasts.

While it remains to be seen what will happen with Shibarium in the future, it’s already an inspiration in the ever-expanding world of digital finance!