The SHIB Phenomenon: from a Memecoin to a Full-fledged Financial Ecosystem


The SHIB coin, which at the dawn of its existence was perceived as a memecoin and a clone of DOGE, today is of interest to many crypto investors. Recently, its creators announced the launch of their own stablecoin. The Shiba Inu development company has quite big ambitions. In May, they announced that the core financial components of the SHIB ecosystem were nearing their final stages of development.

The lead developer of the token, Shitoshi Kusama, shared the upcoming changes with the crypto community. “Shibarium” is a SHIB blockchain that uses its own BONE token to support the backbone of all Shiba Inu projects. The stablecoin currently in development will be called SHI. Thus, from a joke token, SHIB has transformed into a full-fledged ecosystem. Together with experts, we try to figure out what the reason for the wild popularity of the project is and whether this meme-coin is really not as simple as it seems at first glance.

What is the reason for the popularity and success of SHIB?

SHIB throughout its existence has often showed unprecedented jumps in the growth of the exchange rate by hundreds and thousands of percent. In 2021, the coin even made to the TOP-10 cryptocurrencies by market capitalization. Today, Shiba Inu is ranked 14th on the CoinMarketCap website. SHIB is considered the chief rival of DOGE and has long gone beyond a meme coin, which it originally was. The project is constantly evolving and improving. The community is currently waiting with bated breath for the next major update.

SHIB is an ERC-20 token built on the Ethereum blockchain. The biggest disadvantage of the Ethereum network has historically been high transaction fees. Once implemented, Shibarium is expected to become an internal transaction platform that will provide users with more favorable fees. The Shiba Inu ecosystem will include its own stablecoin, a decentralized exchange (DEX), an NFT gaming platform, and a metaverse application.

We asked experts why, although the coin is positioned as a memecoin, it is in the TOP-15 cryptocurrencies by capitalization and is now a serious project that has grown into a full-fledged financial ecosystem. Surprisingly, opinions are split. Some admire the success of SHIB and believe in the project's future, while others still believe that this is nothing more than a useless meme coin that has risen only due to hype.

Evgeny Pavlyukevich, Co-Founder and head of the blockchain division of Atras studio, researcher at Lomonosov Moscow State University, agrees that in 2021 the SHIB token really took off to incredible heights. The expert notes that the project has evolved from a meme token to an ecosystem that includes LEASH and BONE tokens, the ShibaSwap decentralized exchange, and the Shiba NFT incubator. The main reason for the growth was, as is usually the case with cryptotokens, the rush of interest that jumped on Elon Musk's tweets. Later, the price was supported by the Kraken crypto exchange, which registered the coin. At the end of last year, the project team announced the creation of its DAO, and at the end of March they announced plans to create a metaverse.

Anton Bykov, senior analyst at Esperio, emphasizes that the right marketing is the key to the cryptocurrency market, saying,

“Most of the projects from the TOP-100 are nothing at all, since they are at the very initial stage of development, they are copies of copies, and it is completely unclear whether they can skyrocket in the end or not. Even concerning Ethereum, it is only a stretch to talk about some real application. Yes, developers create applications on the web, but the number of users of even the most popular of them is incredibly small. Skilled PR people, together with market makers, are able to increase the price of any coin in order to earn money and constantly feed the interest of the public. The appearance of SHIB was extremely spectacular, and later DEX Shiba Swap was announced and launched, and now they promise a stablecoin to the public. It is quite possible that they expect to send the price up again, but to what extent it will be possible to do it in a falling market is a big question.” 

The expert adds that about 310 unique addresses turn to ShibaSwap smart contracts in the Ethereum network. According to these figures, the project is outside the top twenty in terms of popularity. For example, in the 10th place is 1inch, which is used by about a thousand addresses a day, and the most popular decentralized platform is UniSwap with 8 thousand addresses, while in the first place is OpenSea with 25 thousand calls. Thus, it is rather strange to talk about the existence of some popular blockchain projects, much less to call SHIB some kind of “full-fledged financial ecosystem”. According to the Esperio analyst, SHIB is a full-fledged shitcoin, whose creators are great at pumping the rate.

Yaroslav Safonov, Director for Distribution Channel Development for EMCD, the largest mining pool in Eastern Europe, does not believe in the project's success. He is confident that Shiba Inu will always remain a memecoin, since this is a project created with only one goal, which is to get ahead of Dogecoin in terms of capitalization (this was the main goal of the project spelled out in the White paper). The team did not set any other global tasks. The cryptocurrency appeared in the summer of 2020, but no one knew about it until the summer of 2021. Everything changed when Elon Musk got himself a Shiba Inu dog and named it Floki (by the way, there is another similar project, Floki Inu). After that, Musk's army of fans began to buy SHIB massively, provoking a rapid growth of the token. In October 2021 alone, the altcoin increased in price by 1000%. Such growth was fueled by the ambitious statements of the developers of the coin.

The expert adds that now Shiba Inu is a "waste material", on which they have already made good money and dumped it on time. The mechanism resembles an ordinary financial pyramid, where investors receive income from to the influx of new scheme participants. Over the past six months, the popularity of the coin has decreased significantly, and the hype has passed.

Vladislav Krylov, Editor-in-Chief of, notes that fundamentally memetokens are not something innovative for the market. Their value is largely influenced by the support of the community and individual celebrities. Dogecoin once rose in price with Elon Musk's tweets and viral videos on TikTok.

The expert adds,

“It will be difficult for Shiba Inu to replicate the success of Dogecoin. Yes, the capitalization of the coin is growing, but this happens due to the issue of new tokens. We should pay attention to the rate—at the peak, the price reached $0.00008, and now the coin is trading at about $0.000011. With the current market conditions, a serious price pump is unlikely to await us, since investors will pour assets into more rooted cryptocurrencies, such as BTC or ETH.”

Dmitry Noskov, an expert at the StormGain crypto exchange, agrees that this coin initially appeared and attracted attention solely due to the hype. A similar example is DOGE, which is basically something similar; but after it was supported by billionaire Elon Musk, investors became seriously interested in this project. Musk wrote about SHIB on his Twitter as well. For example, he mentioned he was looking for a puppy of the Shiba Inu breed, after which the token jumped by 70%.

The expert adds that this token gradually ceased to be just a hype coin, and the developers were actively working on the development of the project and its ecosystem. An important milestone in the history of SHIB was the listing of this token on various crypto exchanges. Another wave of hype was associated with the Kraken platform, which published a survey on whether it should list SHIB. Currently, the capitalization of SHIB is $6 billion, and according to this indicator, the token ranks 14th among all cryptocurrencies. Today it is a crypto ecosystem based on Ethereum, which includes three tokens, the ShibaSwap crypto exchange and an NFT incubator.

Artem Barger, Academic Supervisor of the Master’s Program in Blockchain at MIPT, Chairman of the Expert Council of the Idea Scientific Center, believes that the popularity of SHIB is due to the hype created by the media around the meme coin, exactly in the same way as the popularity of a certain meme that occurs in the Internet space appears. He says,

“The reasons for the increased interest in projects of this type have yet to be fully understood and studied in detail, but today we can say without a doubt that the popularity is quite high mainly as a result of the excitement that followed after the Robinhood poll about which coin to add next for trading on the website. You need to be aware that there are no objective reasons for the rise in prices for such cryptocurrencies. Based on the history of similar altcoins, I think that eventually the market will correct the price.”

Yuri Gusev, Founder and COO of, says,

“Once, the creators of SHİB transferred half of all existing coins to Vitalik Buterin, and he began to support the coin actively, thereby endowing it with certain “superpowers”. And other members of the crypto community believed the memecoin. All Vitalik's followers began to invest in this asset, which, in fact, had no value. A similar situation is with Doge, which has been actively supported by Elon Musk. Do not forget that the SHİB coin was originally conceived as a social experiment that received incredible coverage. Now the company has gathered the necessary community, support, experience and funds to launch a full-fledged ecosystem. I think this is the right and logical step. I am sure that SHİB has every chance to turn from a memecoin into an entire ecosystem.”

Vladimir Gorgadze, head of the Blockchain master's program at MIPT, Co-Founder of the Atomyze tokenization platform and Newity IT company, thinks that the lion's share of the project's success was provided by unsubstantiated hype, the success of DOGE (largely thanks to Elon Musk), a playful clone, a pretty dog face, general market growth and successful marketing. With the appearance of capital, the developers have plans for the Shibarium Financial Ecosystem ecosystem. However, the expert believes that this project may be of interest only for short-term investments.

SHIB ecosystem stablecoin

It is of separate mention that after the launch of Layer-2, Shiba Inu has additional plans to develop an algorithmic stablecoin that will be pegged to one cent instead of the typical dollar peg used by most other stablecoins and will be used as a form of digital payments for microtransactions.

We asked experts if the SHIB stablecoin would be a success, given not only the reputation of the coin itself but also the recent situation with UST of Terra (LUNA), as well as the attention of regulators to this asset class which has increased recently.

Dmitry Noskov is sure that now is not the best time to launch a stablecoin, precisely because of the situation with UST. Today, investors are very disappointed in such assets and are unlikely to be interested in a new product, because there is even less confidence in new tokens than in existing ones. However, the expert adds that when this situation loses its freshness a little, there is hope that the SHIB stablecoin will be able to gain investor confidence and have a chance to succeed. All in all, most probably, this is a pretty good quality product.

Evgeny Pavlyukevich does not think that the new SHIB development will succeed. He says,

“A distinctive feature of the coin is the concentration of a large number of tokens in a small number of wallets. This is a big problem, as the coin is often "fevered" just because someone buys or dumps a large number of tokens. Due to this, storing this token for a long time is not only risky but also almost stupid. In the current state of uncertainty in the US economy, the rate is more likely to fall, as whales tend to get rid of risky assets, which SHIB is.”

Yaroslav Safonov is surprised that the Shiba Inu developers continue to promise users more and more features in order to pump their token and raise its value. In the past few months alone, the Shiba Inu team has announced the development of its own decentralized exchange, the release of an NFT collection, and the creation of an NFT marketplace. According to the expert, plans to create a stablecoin are another attempt to promote a dying project. If most analysts are right and financial markets (including cryptocurrency) are on the verge of a large-scale recession, then Shiba Inu with a fairly high probability will have the fate of 95% of meme projects: they will cease to exist.

Vladislav Krylov believes that the success of the stablecoin of SHIB is possible only with the support of the community. For example, Elon Musk’s tweet about Floki at one time increased the price of the token on September 9, 2021 by about 4 times.

Artem Barger says,

“I don't think that the recent situation with Terra (LUNA) will affect the success of SHIB in any way. Here, most likely, there is an effect created by the media around the token, as well as a growing interest among investors, in particular, institutional ones. At the moment, the project has even managed to get out of the shadow of DOGE, but how long this situation will last is quite difficult to predict.”

Dmitry Zamolotsky, an analyst in the banking and cryptocurrency sector, a successful businessman, believes that SHIB and DOGE can be a good option for settlement coins for purchases in stores that cannot issue their own cryptocurrency. Yet, the expert notes that the success of the stablecoin from SHIB is difficult to predict, and it is definitely not worth attention if it is another algorithmic pyramid.

Hype for meme coins

It is worth touching on the popularity of meme-coins. We asked experts why coins that do not carry any practical value or utility are often more successful in the market than really worthy and unique projects. Is it really just a matter of hype and proper marketing?

Vladimir Gorgadze, Head of the Blockchain Master’s Program at MIPT, Co-Founder of the Atomyze tokenization platform and Newity IT company, says,

“Alas, yes, hype, competent marketing and deliberate malicious actions of competitors in relation to worthy projects often bring cryptocurrencies that are quite useless to the top. However, even in the strictly businesslike financial world there is room for humor. The process of earning should also bring pleasure, there should be a place for emotions in life—and a good humorous mood in the team often contributes a lot to success in business.”

Ivan Petrov, a professional technical trader, macroeconomist, Founder of the Eco Investments school of profitable investment, notes that in theory there should be a certain value behind any financial asset. It is the value in the eyes of the market that determines the growth in demand for an asset and, as a result, the growth of its value. The cryptocurrency market "gives birth" to so many different projects, services, companies, ideas that an ordinary investor simply does not have enough time or expertise to keep track of everyone or much less to understand each one in detail. That is why there are entire classes of assets in the cryptocurrency market, the practical value of which may be completely absent. And the paradox here is that even without an understandable specific benefit, the value of some assets can fly away to the moon. In order to understand why this happens, you don’t even need to delve into the intricacies of the mechanics of price movements on the stock exchange or thoroughly study trading as a profession, much less to “dig into the fundamentals”. Sentiment rules the market! It is enough to understand the elementary psychology of all market participants. Their only desire is to make money.

That is why investments in memecoins often show high returns. Fear of lost profits drives those who want to buy at rising prices into the market. Many creators of memecoins dream that their coins, which in fact have no practical value, will be “pumped” (so that their value can rise sharply and quickly). And if you conduct a fairly competent marketing promotion on forums, in the media, among investment bloggers, then it is quite possible to convince the “crowd” to buy and buy a specific asset, provoking demand, and thus make the price rise and rise. It is this "success story" that happened to SHIB. And then, when the success has already taken place, and traders, investors, and creators have earned on the frenzied price growth of SHIB, buyers take profits on high prices (the price naturally collapses), but this does not have to be the end. At this point, the creators of the “shot” crypto coin, who, in fact, already enjoy a lot of money, have two ways: to go down in history and live a comfortable life, or to invest the money they earned in creating something really useful. It is the second path that the creators of SHIB probably chose, starting to turn the once "obscure" project into a unique, necessary, real and valuable ecosystem.

Vladislav Krylov, Editor-in-Chief of, says,

“It's hard to agree with that. Hype and marketing allow you to promote the price of the coin, but at a distance, if the project does not bring anything fundamentally new, it is unlikely to bypass Bitcoin. In 2011, there appeared a lot of copies of the first cryptocurrency, but only Litecoin survived. However, the latter has no chance to take a place in the top 10 in terms of capitalization, either.”

Artem Barger, Academic Supervisor of the Master’s Program in Blockchain at MIPT, Chairman of the Expert Council of the Idea Research Center, says,

“Naturally, the reason for the popularity of such projects lies in proper marketing and maintaining interest and excitement among potential investors. The situation is very similar to that with startups and advanced technologies: sometimes a startup with a rather mediocre technology at its core skyrockets, and along with this, a startup with really great potential lags behind. In many ways, the reason lies precisely in the ability to present information beautifully and build competent marketing. I am deeply convinced that the situation with meme coins is absolutely identical.”

Dmitry Noskov, StormGain crypto exchange expert, emphasizes that hype and proper marketing are the main secrets of success. The crypto market itself is a place where a huge number of projects operate that attract speculators and people who expect to receive high returns in a short period of time. They are willing to take risks. That is why they pay attention to projects that do not have a serious economic and technological basis, but have a chance to “shoot” on the hype.

Evgeny Pavlyukevich, Co-Founder and head of the blockchain division of Atras studio, researcher at Lomonosov Moscow State University, stresses that the success of a particular token is well described by Jeffrey Moore's model of crossing the abyss. In the beginning, the token provides itself with a small community, in which the coin begins to pump. This is about 5% of the potential audience. If the coin does not scam at this stage, then we can assume that it has crossed the “chasm” and is ready for a large number of investors to enter. This happened to SHIBA. He adds,

“When in May 2021 Elon Musk caused the collapse of the DOGE exchange rate and people found a replacement in a similar meme tool (after all, where DOGE was, SHIBA has always been since its inception), a huge audience came from the USA who were actively investing in crypto. It was the so-called "early majority", about 30% of the potential audience. Then the hype subsided, the rate fell and jumped only when Musk wrote a tweet about his dog breed Shina Inu. SHIBA owners decided to buy more, because ‘Musk tweeted the word Shiba, we definitely need to buy more,’ and those who missed everything in May decided not to miss their luck and also buy. Moreover, the audience arrived not only from America, but from all over the world—the “late majority”, about 35% of the potential audience. It is important to understand that there was no fundamental backing for the token. At that time, there was not even news about the metaverse or the DAO. And the fundamental information that was there could not support a thousand time growth in any way.”

The expert adds that the reasons why hype is now more important than fundamental factors in the world of crypto lies in the youth of the market. The capitalization of the entire cryptocurrency industry is estimated at $1.2 trillion, while the capitalization of the entire world stock market is over $100 trillion. In the emerging market, hype, marketing and project wrapping are always more important, otherwise there will be no explosive growth. Here you are always met by clothes, and not by the inner world. Attraction provides for explosive growth. After attractiveness come big players (for example, states), which change the institutional conditions (fundamental) and which will ensure slower, but sustainable growth.

Dmitry Zamolotsky, an analyst in the banking and cryptocurrency sector and a successful businessman, believes that the reason for the popularity of memecoins is not limited to hype only, but hype is often more important than the essence and benefits of the project. Many teams spend more on marketing than on project development.

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