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John Martin 07 Feb 2024 ◦ 9 min read

What Is Shibarium? An In-Depth Look at Its Purpose and Potential

What Is Shibarium? An In-Depth Look at Its Purpose and Potential

Shibarium Overview

Shibarium is a new second-level blockchain network (L2) built in Ethereum for Shiba Inu. This will turn Shiba Inu, a memecoin, into a full-fledged ecosystem.

Ryoshi, the anonymous creator of Shiba Inu, proposed the Shibarium project in a now-deleted blog post in May 2021. As part of the project, a second-level blockchain will be built on the Ethereum blockchain. The expansion transforms Shiba Inu from a meme coin into a comprehensive ecosystem, including decentralized exchange (DEX), metaverse, and blockchain games such as Shiba Eternity.

Memecoins are cryptocurrency tokens that depict comical or animated internet memes. These coins tend to be volatile, largely driven by pop culture, and have an oversupply, leading to high inflation. The total supply volume of Shiba Inu (SHIB) is one quadrillion, equal to 1,000 trillion. The Shibarium portal aims to reorganize Shiba Inu into a multi-project, stable ecosystem.

Shibarium developers have not yet announced the launch date for the project. However, an alpha preview of SHIB metaversion, which is a part of the project, was presented at SXSW 2023 from March 13 to 15. The release was originally planned for February 2023 but was postponed because the developers wanted to release an error-free version after careful testing at various stages.

Purpose of Shibarium

The benefits of using Shibarium include faster transaction speeds, lower fees, increased token utility, and the seamless development of decentralized applications (dApps).

Despite the transformation of the Ethereum blockchain into a proof-of-stake (PoS) blockchain as a result of the merger, the Ethereum blockchain is still experiencing scalability difficulties, despite a reliable level of security. 

Shibarium is also a PoS project that will help Shiba Inu scale while maintaining its connection to the Ethereum blockchain. It is expected that Shibarium will stabilize the value of SHIB and turn Shiba Inu into a project with high-added value and long-term prospects.

  • Increasing transaction speed: By adding a second layer to the Shiba Inu ecosystem, Shibarium will increase throughput, allowing the project to cope with significant growth. Shibarium is expected to significantly increase transaction speeds, although users will have to wait slightly longer to obtain accurate bandwidth information.
  • Lower fees: High transaction fees were a problem for everyone who conducted transactions on Ethereum. Sometimes the commission exceeds the transaction amount. For example, for a small $10 transaction, you may need to pay a steep $50 commission in Ether (ETH). Implementing the Shibarium second-tier solution will likely make gas fees negligible.
  • The complete ecosystem: Unlike a simple memecoin, the Shibarium ecosystem is complex and includes several projects, including SHIB metaversion, ShibaSwap DEX, and blockchain games. Metaversion and games are expected to attract users and DEX will provide better liquidity.
  • The usefulness of tokens: The abundance of SHIB supply, despite burning more than 40% of tokens, has become a huge obstacle to its growth. Shibarium solves this problem by introducing BONE as a “native” coin. When Shibarium starts working, validators in the network receive money in the BONE to ensure security and confirm transactions. Moreover, in the new ecosystem, every transaction will consume the SHIB, which is a mechanism for controlling the highly inflated SHIB supply.
  • DApp Development: dApps are decentralized applications with internal code running on a decentralized peer-to-peer (P2P) network. However, memecoins did not have sufficient capabilities to work as native dApps coins. Shibarium intends to develop a reliable ecosystem that includes a second-level solution, in combination with Ethereum. This provides the technical capability to create dApps within the ecosystem.

Shibarium Technical Aspects and Architecture

Shibarium removes a significant portion of transactions from the Ethereum blockchain, which increases the throughput without compromising security. The token-burning mechanism helps contain inflation.

The upcoming Shibarium functions by processing transactions, while maintaining the security level of Ethereum. Because most network operations will be performed by Shibarium itself, Ethereum will be spared from the huge volume of transactions that can overwhelm it. This leads to faster and at the same time safer transactions.

Before the adoption of the PoS, the low bandwidth of Ethereum led to network congestion and an increase in gas fees to an astronomical $50-80 per transaction. The merger increased network bandwidth and reduced fees. However, L2 solutions are necessary because the underlying blockchain must process the flow of projects, which slows down its work.

To stop the inflation of the SHIB coin and send its prices upward, the Shibarium portal will have a mechanism for burning SHIB tokens, which are paid as a fee for completing transactions. This reduces the number of coins in circulation and stabilizes the price of tokens.

Coin burning is a mechanism for sending tokens to one–way wallets that accept tokens but never issue them. These coins are lost forever. Over time, the constant burning of coins has curbed inflation in cryptocurrency projects.

Which Coins Constitute the Shibarium Ecosystem?

Several coins have different functions in the Shibarium ecosystem.

Shibarium will have a completely different appearance from Shiba Inu. However, there are several digital tokens in the new ecosystem, named according to the dog's theme.

  • SHIB: The ERC-20 token that fuels Shiba Inu, SHIB, has been in existence since August 2020. Its price has always fluctuated and has never crossed the $1 mark per token.
  • BONE: Management Token on ShibaSwap. BONE was also a useful token in Shibaria. Developers are paid in BONE. The token offer is limited to 230 million coins.
  • LEASH: The supply of LEASH tokens is limited to 107,646 coins and holders bet on them to receive a reward. Rewards include xLEASH tokens that users can mine after unlocking.
  • TREAT: TREAT, developed as a reward token, is paid to validators and developers along with BONE after reaching a certain threshold. It also stimulates liquidity pools in Shiba Swap.
  • SHI: The SHI stablecoin also exists in the Shibarium ecosystem. SHI's goal of SHI is to counteract and balance payments by preventing market fluctuations.

The Future of the Shibarium

Although it is not yet possible to say exactly what the future of Shibarium will be, there is no doubt that this second-level solution is full of benefits to the Shiba Inu ecosystem.

First, it removes the barrier of entry into investing in SHIB tokens caused by the high gas fees on the Ethereum network. Given that Shibarium can eventually process approximately 10,000 transactions per second, users will be able to enjoy fast transaction speeds with lower fees. This may have contributed to the growth in acceptance of Shiba Inu tokens.

Shibarium is expected to expand the Shiba Inu ecosystem and transform it from a meme coin into a more serious blockchain project.

If successful, Shibarium will significantly transform the Shiba Inu ecosystem, including additional tokens, blockchain games, and decentralized exchanges. To learn more about the potential benefits of this second-level solution for Shiba Inu, it is worth following the latest developments in Shibarium.

Conclusion

Despite the problems at launch, the Shibarium blockchain is a necessary solution for scaling the Shiba Inu ecosystem. However, this is more than just an addition to the Shiba Inu universe. This indicates a transformational shift, which is a living and evolving entity ready to adapt to the needs of its users.

This solution has the potential to increase the acceptance of the Shiba Inu token while providing lower and higher transaction speeds without compromising security. As Shibarium develops, it is important to keep an eye on its development, regardless of whether you are a cryptocurrency enthusiast or an investor.

Remember, always do your own research when it comes to any cryptocurrency transactions.

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