The current cryptocurrency bull run can be signed off to a multitude of events in this ecosystem. The institutional interest in cryptocurrencies, the rise of decentralized finance, and the proliferation of NFTs have all contributed significantly to the general increase in the value of digital assets. This has made trading platforms such as Bitlevex increasingly popular for accessing financial instruments such as crypto binary options.
However, meme coins have also contributed to the rise of cryptocurrencies. Dogecoin and copycats such as Shiba Inu and Floki have given mainstream investors some much-needed crypto exposure.
In this article, we explore one of these meme coins, namely the Shiba Inu (SHIB) cryptocurrency. We will take a closer look at the ecosystem behind this token and how it gives investors access to passive income through liquidity mining Finally, we will take a look at the recent price rally that brought the SHIB token 300% gains in just a couple of days.
What is the Shiba Inu (SHIB) cryptocurrency?
It would be a disservice to talk about SHIB without mentioning the original meme coin, DOGE. Dogecoin was created as a meme, a sort of a joke to mock the seriousness of the crypto investor “get rich” mindset. As such, DOGE has seen an incredible following throughout the years by the mainstream investor. This is despite some flimsy fundamentals and an unlimited max supply.
Shiba Inu was created to ride the train of the Dogecoin popularity. As another meme coin, it is supposedly created to be the DOGE killer, providing a better network and increased use cases than the original meme coin.
From a more technical point of view, SHIB tokens are created on the Ethereum network as ERC-20 tokens. And while the cryptocurrency does have a maximum supply, it might as well not have one. The supply is capped at 1 quadrillion SHIB tokens which inflated the market cap of this cryptocurrency and helped it skyrocket into the top 20 coins almost overnight.
However, unlike DOGE, SHIB has more use cases than just serving as a means of exchange. It plays a vital role in an intricate decentralized token swap ecosystem called ShibaSwap.
How does the ShibaSwap ecosystem function?
The ShibaSwap exchange is a platform where users can easily swap between different ERC-20 tokens created on the Ethereum network. Like most decentralized exchanges, ShibaSwap depends on liquidity providers to offer liquidity of the tokens that are proposed on its network.
Liquidity providers can lock in their funds through audited smart contracts and receive rewards for their service in the form of FLOKI tokens. More importantly, when locking SHIB tokens on the network, users can receive rewards for both staking and providing liquidity. There are three different cryptocurrencies nested in the Shibaswap ecosystem:
- SHIB – the original network cryptocurrency.
- LEASH – incentive tokens distributed to those that provide liquidity to the platform.
- BONE – rare LP tokens (max supply of around 100.000) used to get even more rewards within the exchange platform.
One of the main appeals of the shibaSwap exchange is the access to a passive income for SHIB holders. Users can either:
- Bury, which is the same as staking SHIB for securing the network.
- Dig, which is the euphemism for providing liquidity to the exchange.
Finally, one important factor in SHIB’s success is its low price. Valued at around $0.00002 at the moment of writing, users can purchase billions of tokens with a modest investment. Then, a small rise in the price could potentially make them millionaires.
Why did SHIB pump 300%?
Meme coins are known to greatly fluctuate in price because of social media attention. More precisely, Elon Musk’s bullish tweets about Dogecoin have often contributed to a sudden price surge of the original meme coin. However, this time around, it seems that the pump that brought 300% gains to the SHIB coin was not directly related to Elon Musk’s tweets.
Elon Musk’s tweet that supposedly pumped SHIB’s price had actually nothing to do with this incredible market move. Coindesk reports that the price surge should be signed off to the SHIB whales that drastically increased their token purchases.
This increased whale interest started to move the price higher and triggered a fear-of-missing-out (FOMO) phase with the SHIB followers, commonly referred to as the SHIBArmy. Retail investors bought in the craze and drove prices even higher, pushing SHIB into the 13th spot of the highest valued cryptocurrencies by market cap at one point.
Thanks to their social media impact, meme tokens such as Shiba Inu offer the mainstream investor some cryptocurrency exposure. While they are often classified as extremely risky assets that could reach zero value, many still consider them as sound investment assets. As long as you understand the risks of such highly volatile cryptocurrencies, they can be a great way to make some quick profits.