The world of digital currencies is constantly evolving — don’t worry if you don’t even know what Shibarium is.
As many developers were upgrading their existing networks to improve their ecosystem, the idea of Shibarum was born. This Layer 2 solution is built on the ETH blockchain, and its goal is to reduce gas fees and speed up transactions.
That said, to keep you up-to-date with the latest news, we’ve created a guide about Shibarium, in which we’ll talk about its features and its impact on the Shiba Inu token. Here’s all you need to know.
What Is Shibarium?
Shibarium is a Layer 2 solution created by the Shiba Inu developers. Its main purpose is to address scalability issues and speed up transactions. The platform was launched in August 2023, after passing beta testing in 2022.
Like Ethereum, Shibarium uses the Proof-of-Stake consensus. Shibarium has a native token, BONE, which is reserved for validators and delegators. Users will also be able to use BONE to pay gas fees. Furthermore, Shibarium will enable its owners to create NTFs, decentralized applications, and blockchain-based games.
With that in mind, Shibarium has the potential to improve the practicality of the Shiba Inu token and increase its value in the crypto market.
How Does Shibarium Work?
Shibarium merges multiple transactions, which it then processes off-chain. This reduces network load, leading to cheaper and faster transactions. After transactions get processed off-chain, they are sent back to the ETH blockchain. This ensures their authenticity and security.
With each transaction, a share of SHIB tokens gets burned. Moreover, Shibarium imposes base fees and priority fees. The former are locked in the contract, while the latter are paid to validators. On that note, 70% of the base fee is used for burning, while 30% is used for maintaining the network. Keep in mind that this structure may change in the future.
The burning process involves manual and automated burns, which should begin in January 2024. Some analysts believe this approach could increase the value of the Shiba Inu token as it will make it more scarce.
When it comes to nodes, they have a two-layer structure. The first layer is the block producer layer, i.e., Bor, while the second layer is the validator layer, i.e., Heimdall. On that note, Bor aggregates transactions into blocks, and Heimdall manages the validators. To qualify as validators, users will have to lock 10,000 BONE tokens.
Shibarium as a Layer 2 Solution
Layer 2 is a protocol built on top of the Layer 1 protocol. The main idea behind the Layer 2 protocol is to process transactions off-chain to improve the scalability and security of the network.
As a Layer 2 protocol, Shibarium is built on top of the ETH network. This means that all transactions are processed outside the Ethereum blockchain, which reduces the load on the network.
Less load on the network means faster transactions and lower fees. This is very important for the Shiba Inu ecosystem as it will make the network more accessible. As such, Shibarium is key to the growth of the Shiba Inu token’s value.
How Does Shibarium Affect Shiba Inu?
Shibarium can greatly affect the development of the Shiba Inu. On that note, this project has the potential to improve the features and long-term potential of this meme token. Here’s how.
Shibarium uses a PoS consensus mechanism that can help Shiba Inu with the scalability problem. Namely, Shibarium has the potential to stabilize the value of SHIB.
As a Layer 2 solution, Shibarium will ensure faster transactions and it will reduce transaction costs. This is important since ETH users often pay higher transaction fees than the value of the transaction.
The large supply of SHIB tokens is an obstacle to its growth. Shibarium aims to solve this problem by creating the BONE token. These tokens will be used to pay gas fees and as rewards for validators.
What Are the Main Features of Shibarium?
The main features of Shibarium include the following:
Slow transactions have always been the main problem of the Ethereum network. One of Shibarium’s functions is to solve this problem by conducting transactions off-chain.
Reduced Gas Fees
As mentioned above, transaction fees on the Ethereum network can be very high. The main reason for this is network congestion. As a Layer-2 solution, Shibarium should significantly reduce gas fees.
Shiba Inu uses five utility tokens — SHIB, BONE, LEASH, TREAT, and SHI. Each token comes with different use cases.
For example, BONE tokens are used to reward validators, while SHI tokens will become Shiba Inu’s stablecoins. However, unlike standard stablecoins that are pegged to $1, SHI will be pegged to $0.01. On the other hand, LEASH will be used as a rebase token, while TREAT will be used as a reward for Shiba Inu investors.
An Ecosystem of Its Own
Shibarium has an ecosystem that includes blockchain-based games, SHIB metaverse, and ShibaSwap. Moreover, Shibarium will enable developers to create decentralized applications. This extensive approach can expand the Shiba Inu community, elevating it above the status of a simple meme coin.
What Are Some Important Shibarium News?
Here’s what you need to know about the current status of the Shibarium project:
- Shibarium has a wide user base of over 1.3 million active users. Furthermore, BONE has a current price of $0.6241, while its market cap stands at $142,929,943.
- The well-known crypto exchange, CoinRabbit, has announced that it will start listing LEASH tokens.
- In January 2024, Shibarium developers plan to add an automatic burn feature that will burn SHIB tokens. This step will mark a major improvement in Shibarium’s roadmap.
- The Shibarium application will soon get a Donate feature to support non-profit validators. This feature will allow users to send their tokens to validators of their choice. Shibarium currently has only 12 validators, while the network itself has 100 validator slots.
Learning what Shibarium is means recognizing it has the potential to improve the Shiba Inu ecosystem by offering faster transactions and lower fees. This can increase the adoption of the SHIB token, as well as its value.
Moreover, thanks to Shibarium, Shiba Inu got its stablecoin, the SHI token, which is pegged to $0.01. At the same time, its other utility tokens, LEASH and TREAT, will be used as rebase tokens and rewards for those who invest in Shiba Inu.
However, the best feature of Shibarium is that it allows its holders to create NTFs, dApps, and blockchain-based games.