There is no set answer to the question of how famous memecoins Shiba Inu (SHIB) and Dogecoin (DOGE) plan to outperform each other in the next bull run. That said, a few factors, including the development of their ecosystem, could shed some light on the direction in which the two cryptocurrencies are heading.
Let’s assume that the next crypto bull market is inevitable. Analytics firm Messari has identified seven unique trends that could help make this happen: apps, decentralized social trends, web3 gaming trends, new Layer 1 (L1), Ethereum rollups, and more.
Many of these elements are already under development. The same goes for Shiba Inu, a dog-inspired token that was created to compensate for the lack of functionality of the Dogecoin (DOGE) crypto. DOGE, originally conceived as a joke, has since gained memecoin status thanks to the support of billionaire Elon Musk.
After a massive rally last year, according to CoinGecko, SHIB’s price has fallen 87% since peaking at $0.000086 on October 28, 2021. As the token has declined alongside the rest of the crypto market , investors also brought their expectations of the asset down to earth.
Despite this decline, however, Shiba Inu remains the 14th largest cryptocurrency in the industry, with a market capitalization of $6.11 billion. This figure is to be compared to the 7.98 billion dollars of DOGE, which is for its part the tenth largest crypto asset on the market. Dogecoin is also down 92% from its all-time high of $0.7315 reached on May 8, 2021.
A developing ecosystem
Shiba Inu was designed on the Ethereum blockchain, which makes it compatible with this ecosystem. The goal then was to ensure that its connection to the second largest cryptocurrency network in the world attracted developers and users to the SHIB project.
And what better way to do that than to send half of Shiba Inu’s initial supply, a quadrillion tokens, to Ethereum co-founder Vitalik Buterin? The latter then immediately sold about $1 billion worth of SHIB and donated to the pandemic relief fund in India.
He sent the rest, about 40% of the tokens, to a so-called “dead” wallet, which is the same as saying that he burned them. The bond with Vitalik Buterin, however, has allowed Shiba Inu to attract attention. However, the SHIB did not experience the development expected by its creator, known under the pseudonym of Shytoshi Kusama.
Combustion, or “burn” of tokens, is one of the strategies used by the Shiba Inu ecosystem to stimulate the price of the token and gain an advantage over Dogecoin. According to data from Shib Burnover 410 trillion SHIBs have been burned to date.
SHIB tokens are thus destroyed by sending them to a “dead” wallet, as Buterin did. This burning aims to reduce supply and increase demand, in hopes of driving the price of the coin higher. Given the massive supply of this asset, however, a large amount will have to be burned.
In comparison, the DOGE does not practice burning. Thus, this means that instead of capitalizing on scarcity, the supply of dogecoin is endless. As a result, DOGE is inflationary, which has the potential to negatively affect its value over time.
That said, his community doesn’t see it that way. According to the asset site, “Dogecoin does not need the coin-burning marketing mechanisms that new tokens and other chains have attempted to deploy to artificially inflate their price.”
The many projects of Shiba Inu
In mid-August, the SHIB price soared over 42% in one day, before losing all of its gains by the end of the month. However, the network has planned to launch the game Shiba Eternity this October 6, which could act as a bullish catalyst for the meme currency.
This game is part of the major advancements of the Shiba Inu network. Shibarium, a layer two (L2) solution, is also said to be in the works to help boost its functionality by reducing the cost of transactions.
Shiba Inu already has a decentralized exchange (DEX), which allows its users to perform peer-to-peer transactions. The DEX however needs to be updated to ShibaSwap 2.0. There are also plans to create a metaverse, this as part of a big project to attract more users to support SHIB’s demand and drive up its price.
For Dogecoin, a decentralized exchange has yet to be set up.
Yohannes Christian, research analyst at crypto exchange Bitrue, told Be[In]Crypto:
“Although both currencies will most likely continue to thrive, my personal opinion puts SHIB ahead of the competition.”
“This is due to the fundamentals at the base of the token. While DOGE has its own mainnet, or mainnet, SHIB is built on Ethereum. Its speed as well as transaction cost will likely become more efficient in the future,” Christian said. He added :
“SHIB’s tokenomics, which has a cap and proves to be deflationary with its community burn and partnership with merchants, has made it a commodity. Its value is therefore likely to increase over time. At the same time, DOGE is an inflationary reward token for those who mine it, with an inflation rate of around 4% per year.”
Yohannes Christian said rumors about Shibarium and its metaverse, which will feature a burn tax mechanism of up to 5% of trades, could lead to “SHIB’s price most likely having more momentum during of the next bull run”.
The crypto whales
In the crypto world, whales, or whales, constitute quite crucial elements of the ecosystem. Therefore, holders and trackers are always on the lookout for the best whales of each cryptocurrency.
This has, for example, given an edge to Dogecoin, which is favored by Tesla founder Elon Musk. Indeed, the billionaire regularly shares his support for this canine-inspired currency on Twitter.
Elon Musk is considered a top Dogecoin whale, and has denied owning SHIBs, dealing a massive blow to the self-proclaimed “Doge killer” However, analysts say the CEO’s tweets about Dogecoin have minimal effects on the price of the asset market.
The billionaire for his part claims that even though Dogecoin was created as a “dumb joke, it is better suited for transactions” than Bitcoin. Tesla has also started accepting the asset for payment for certain products.
Ethereum whales, on the other hand, love the SHIB token. According WhaleStats, the top 100 Shiba Inu holders, not including exchange addresses and project wallets, also hold Ethereum (ETH) crypto. On the list of the richest holders, about nine wallets own more than 1% of SHIB’s circulating supply.
In total, the top 100 Shiba Inu whales own 20% of the total token supply. On average, each wallet holds 1.955 billion SHIB, worth more than $21 million. This represents a total of over $2.1 billion. It therefore appears that there is no single whale monopoly on the asset, with none possessing more than 10% of the circulating supply.
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Shiba Inu (SHIB) VS Dogecoin (DOGE): who will take the lead in the next bull run? – BeinCrypto France
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