If you’d bought the seemingly worthless meme coin on November 28, 2020, at current prices, you’d be up over 19,000,000%.

At all-time highs, you’d have been up over 1,500,000,000%. To put that into perspective, if you’d put in $100, you’d have had $150,000,000.

Those are some mind-blowing numbers for a token that openly has absolutely zero value (to be fair, its developers initially never claimed it had any utility or use case).

Fast forward to the present day, $SHIB is down 87% from those highs, but is still sitting as the 15th largest cryptocurrency by market cap.

The ever-growing Shiba Inu ecosystem consists of four tokens, NFTs, and a decentralised exchange (DEX).

Recently, Shibarium, a layer 2 scaling solution, went live into public beta, and SHIB: The Metaverse is set for release this year.

Will these upgrades give $SHIB any real value, or is this just a meme coin with extra polishing? Will we see it pump past previous highs, or are recent actions simply an attempt to pr­op up inflated prices?

Today, we find out! 

Disclaimer: This is not investment nor investment advice. Only you are responsible for any capital-related decisions you make and only you are accountable for the results.

TLDR

• Shiba Inu plans to launch Shibarium, a layer 2 scaling solution to bring new protocols and more users into the ecosystem. 
• Its metaverse is also set for release, adding considerable value to the tokens as they’ll be used for purchases, burns, and gas fees.
• However, there are red flags:
  • $LEASH and $TREAT are two reward tokens that are basically worthless. They are timebombs that will either hyperinflate or devalue, potentially bringing the whole Shiba Inu ecosystem down with them.
  • Shibarium pretends to be a layer 2 that benefits from Ethereum’s security. That’s a lie: It’s actually a completely separate sidechain.
  • “Metaverse” is a buzzword that’s thrown around to create value. The truth is, crypto metaverses are worthless. It’s highly likely the winning metaverse will not be crypto-native, as the technical barriers are extremely high and centralised entities can offer a better user experience.

 The $SHIB ecosystem

Before we go any further, let’s get to grips with $SHIB’s ecosystem…

ShibaSwap

ShibaSwap is a decentralised exchange (DEX), that allows users to trade crypto tokens, stake $SHIB, provide liquidity, and earn rewards.

Shibarium

Shiba Inu’s supposed layer 2 network will be the home for its “metaverse,” as well as a range of dApps (decentralised apps).

SHIB: The Metaverse

Set for launch this year, the metaverse is “where all ecosystem tokens meet”.

There will be 100,595 land plots.

Like any metaverse, Shiba Inu is hoping to build a bustling digital economy, with games, NFTs, stores, meeting spots, and more.

The tokens

$SHIB

The original token.

The only value for $SHIB comes from token burns (i.e., when $SHIB is removed from circulation).

When it’s live, Shibarium’s base fee (the minimum fee that is always charged) will be converted from $BONE (see below) to $SHIB and burned.

Upon the metaverse launch, $SHIB will be used to add pictures and logos to land plots, name plots, and lease land. These transactions will burn $SHIB. 

$BONE

Previously, $BONE was just ShibaSwap’s governance token.

It’s now set to be used for transaction fees on Shibarium, which will add significant value if the blockchain is a success.

$LEASH

Designed as a reward token, $LEASH, is a way for Shiba Inu to pump value into its ecosystem.

To give it value, holders have been given boosted rewards for providing liquidity, plus early access to SHIB: The Metaverse land sales.

$TREAT

Another reward token (hmm….)

Few details about $TREAT has been released, but we know it will be extremely inflationary.

Tying it all together

Shiba Inu’s vision:

1) Launch Shibarium and use the network as a base to grow the ecosystem. Bring in new protocols and more users.

2) Launch SHIB: The Metaverse. Living on Shibarium, the use of the metaverse will constantly add value to the rest of the ecosystem, through land and items sales, gas fees, and token burns.

There are issues, though…

Ponzi or gem?

Crypto is well-known for using complex value-generation strategies, often based on little to no fundamentals. This is known as ponzinomics.

They are not necessarily a bad thing. Ponzinomics are used throughout crypto to offer complex, unsustainable rewards to bring in initial users, and bootstrap ecosystems.

They’ve been used successfully for $GMX’s multiplier points and esGMX (locked GMX) rewards.

However, in Shiba Inu’s case, tokens have been created ($LEASH and $TREAT), that have little to no fundamental value.

Sooner or later, the developers will need to find real value to warrant the tokens’ prices.

With two new tokens, this is very difficult. How can value be added without taking it away from the existing $SHIB and $BONE tokens?

The more likely scenario is that they hyperinflate or devalue.

Their loss of value will cause effects throughout the whole ecosystem. It could potentially cause a death spiral and bring the whole thing down.

There’s a good reason you don’t see multiple tokens in most ecosystems.

Juggling them all and ensuring each has enough value accrual (without taking away from the others) is an extremely difficult task.

Shibarium layer 2: “Crypto’s greatest deception”

z“Why is this a great lie,” I hear you ask?

Well, despite what the docs, devs, and community say, Shibarium is not a layer 2.

Okay, maybe it’s not crypto’s greatest deception. But it is a big deal.

Rather than being built on top of Ethereum, and benefiting from its security, Shibarium is a sidechain that’s fully independent but still compatible.

Either the person who wrote the official documents doesn’t understand how blockchains work, or they’re lying to benefit from the layer 2 hype. We’ll let you decide which it is…

This is a massive red flag, and the implications could be catastrophic.

Without the security of Ethereum, Shibarium is not safe.

With the ecosystem boasting multi-billion-dollar valuations, an exploit could be the biggest hack in crypto history. It could destroy millions, or billions, of retail investors’hard-earned money.

Metaverses are a load of crap

You’ll have to excuse our language, but this is a point that we need to drive home.

The potential is outstanding but every current example of a Metaverse is worthless. 

Every P2E (Play to Earn) game that’s dying, every basement warrior wanting to raise money, and every token looking to boost its value has turned to creating a metaverse.

They’re simply creating plots of virtual land (which, despite manufactured limits, are unlimited), and hoping they can deliver (most can’t!).The reasons for the metaverse to be built on-chain are noble (transparency, immutability), but they’re unrealistic. The amount of data transfer and storage needed is huge (and unsuitable for crypto).

In reality, it’s highly likely the winning metaverse will be brought to us by a centralised company. The user experience centralised entities can offer is far better.

When the tech is where it needs to be (likely not for at least 3-5 years), and a AAA gaming studio, combined with a VR company, creates a multi-purpose gaming and social metaverse, it will be outstanding.

The projects that shout metaverse right now are just making a token effort to increase their value.

Most can’t deliver. Many don’t even plan to try.

Cryptonary’s take

$SHIB’s market cap currently stands at over $6B, $BONE’s tops $250M, and $LEASH is at $50M.

That makes for a combined market cap of $6.3B. That’s over 3x the level of Arbitrum, and 8x of Optimism.

All it has to show for that mega valuation is an Ethereum sidechain pretending to be a layer 2.

Of course, the fundamental value when $SHIB was at all-time lows was $0, and then it pumped 1.5B%.

There is a chance the same speculators will step in and pump the value of the ecosystem once more. Although this time there is much less room for growth.

At the end of the day, meme coins are casinos.

$SHIB has, in our opinion, failed to create the fundamental value it needs. 

As a result, we’d stay well away!

Action Points

• Always carefully research projects. Don’t believe what the documents say. This is a perfect example of a lie within developer literature.
• When valuing a project and deciding whether to invest, compare it to others at similar market caps. Does it really deserve the same value?
• Don’t get too excited when you see rewards being paid out. Often, these are ponzimonic. They can be extremely profitable, but red flags should be raised. Especially if the token is separate from the rest of the ecosystem.

Cryptonary will not be investing in $SHIB or anything meme-related.

 

Thanks for reading.