What Is Shibarium? How It Works & Latest News

Shibarium is a layer 2 solution that aims to increase transaction speed and lower costs in the Shiba Inu ecosystem. The low scalability of the Ethereum network and costly gas fees have prevented the Shiboshi NFT Project, the Shib Metaverse, DEX features, and Shiba Inu games from ever reaching their full potential.

Shibarium addresses these high costs by offloading some of the transaction data to a dedicated Layer 2 infrastructure while retaining a direct connection to the Ethereum network. Not only that, Shibarium transactions burn SHIB, which could put significant deflationary pressure on the Shiba Inu coin and massively increase its value over time.

Shibarium is a Layer 2 blockchain network built on Ethereum for Shiba Inu. It is designed to address the scalability and cost issues that have plagued Ethereum, making it more suitable for a wider range of use cases, including NFTs, metaverse, DeFi, and gaming.

Shibarium launched on the mainnet in August 2023, following an extensive period of Shibarium beta testing that initially started in 2022.

In this article, we’ll examine the ins and outs of Shibarium, explain its layer 2 inner workings, outline the recent developments, and explore how the price of SHIB could be impacted.

What is Shibarium?

Shibarium is a layer-2 solution for the Shiba Inu ecosystem that aims to increase transaction speed and lower transaction costs. It was first proposed by Ryoshi, the anonymous creator of Shiba Inu (SHIB), as a way to achieve true decentralization and reduce reliance on the Ethereum network.

Shibarium uses Bone ShibaSwap (BONE) as its primary gas token, which is the governance token of the Shiba Inu ecosystem. Shibarium will also feature a simple and effective SHIB burning mechanism, which will reduce the supply of SHIB over time and increase its value.

Shibarium is widely expected to enhance the performance of products and services in the Shiba Inu ecosystem, such as NFTs, games, and metaverse applications.

The number of Shibarium accounts surpassed 25,800 in the first month after the mainnet launch. Image source: Shibarium Scan

The number of Shibarium accounts surpassed 25,800 in the first month after the launch of the L2 product, while the number of addresses surpassed 1 million roughly in the same period.

How does Shibarium work?

Shibarium works by bundling together multiple transactions and processing them off-chain. This means that the individual transactions are not processed on the main Ethereum blockchain, which significantly reduces the load on the network and results in faster and cheaper transactions.

Once the transactions have been processed off-chain, they are then submitted to the Ethereum blockchain for final settlement. This ensures that the transactions are still secure and verifiable.

Shibarium burns SHIB tokens for every transaction, which reduces the amount of Shiba Inu tokens in circulation. Some believe this could increase the value of Shiba Inu coins considerably and make the token far more scarce through deflationary economics. While deflation could play a big role over time, the likelihood of Shiba Inu reaching $1 or experiencing a drastic price increase in the future seems a bit difficult. 

What was the release date of Shibarium?

Shibarium blockchain launch date was August 17, 2023. Shibarium was initially planned to be released in 2022, but the team took a very conservative approach, releasing the Shibarium mainnet only after the rigorous testing phase was complete.

Buckle up #SHIBARMY ? Shibarium is officially live and ready to explore: https://t.co/56VsqOa2jt

— Shib (@Shibtoken) August 16, 2023

It is worth noting that the launch did not go as smoothly as many had hoped. Transactions were getting stuck in a pending state, with over $1.8 million in Ether unable to be processed. Luckily, the Shiba Inu quickly resolved the issue, and Shibarium was up and running smoothly two days after the launch.

What are the benefits and impact of Shibarium?

Shibarium brings several benefits for Shiba Inu users, including lower transaction fees, faster transaction times, and more. In the sections below, we’ll explore each of these benefits in more detail.

Pros of Shibarium:

• Much faster transaction speeds: Up to 100 times faster than Ethereum mainnet, depending on network congestion
• Lower fees: transactions that would cost over $20 on ETH could cost just $0.01 on Shibarium
• SHIB burns: Every transaction on Shibarium burns SHIB tokens, increasing deflationary pressure, which could push up the price of Shiba Inu coins
• Cheaper and faster dApps: faster and cheaper transactions will likely lead to users being more willing to use NFT, gaming, and DeFi features of the Shiba Inu platform

Lower transaction fees

When Ryoshi first proposed the idea of Shibarium, the pseudonymous creator mentioned that it would have minimal or even zero fees. The project lead for Shiba Inu, Shytoshi Kusama, has since clarified that Shibarium will ensure lower fees for every project that builds on it. This is crucial given that high fees remain one of the major problems on Ethereum, and it is where scaling solutions have been able to shine.

SHIB burn mechanism

Shibarium is expected to drastically increase the amount of burnt SHIB and increase the value of Shiba Inu coins. Source

Shibarium also features SHIB burn mechanisms – this is crucial, especially if the SHIB value is to increase. With a current supply of over 580 trillion tokens, the large supply has been one of the factors that have prevented the token’s value from increasing substantially. Although there have been SHIB burns, they’re mostly voluntary, so the burn rate is very slow. Only 40% of the token supply has been burnt so far. 

With Shibarium, it is expected that there will be more activities involving SHIB, which means more gas fees and more tokens to burn. However, as of mid-September, the SHIB burn rate has actually decreased in the past couple of weeks, suggesting that not many users use Shibarium for transaction-intensive dApps.

Faster transactions

All scaling solutions on Ethereum promise faster transaction speeds, and Shibarium is no different. During peak activity periods, transactions on Ethereum could take a while due to network congestion. Ethereum processes about 30 transactions per second. Most Layer-2 networks can process over a thousand within the same period. This means lesser network congestion and more room for adoption.

Shibarium transactions have been quickly approaching the 3M mark. Image source: Shibarium Scan

Better performance

One of the goals of Shibarium is to improve performance for all decentralized applications (dApps) built on it. Faster transactions and lower fees will ensure high throughput. This will be good for  Shiba games and other decentralized applications. For example, the developers launched the Shiba Eternity game in October. Although the game is currently a mobile game, there are plans to have it available on-chain and playable on Shibarium.

DApp development for the Shiba Inu ecosystem

The community also hopes to encourage the development of decentralized applications on Shibarium, which will further boost the utility of SHIB and other tokens. Once there is a Layer-2 solution, those who want to develop within the Shiba Inu ecosystem can do so.

Metaverse

Shiba Inu recently launched its metaverse project with Shiba Inu: the Metaverse. Many believe that Shibarium will play a crucial role in implementing the Shiba Inu metaverse and ensure more efficiency for the metaverse applications.

All in all, the broad development roadmap undertaken by the Shiba Inu developers will certainly be hard to realize. However, given the strong support of the community and clear monetization incentives outlined with Shibarium, Shiba Inu deserves a spot among the best cryptocurrencies to buy in 2023.

What is a Shibarium coin? Shiba Inu L2’s utility token 

Bone ShibaSwap (BONE) is the native Shibarium coin. Ryoshi chose it with the belief that it would give everyone a fair start, unlike SHIB, which already has several whales. However, several users of ShibaSwap DEX had already minted BONE before the community decided to end its minting. There are 229,920,000 BONE tokens in circulation presently, meaning there are likely several whales too. 

Shibarium validators on the network get BONE for securing and validating transactions on the L2 network.

In addition, every Shibarium transaction will consume SHIB, which means that the massively inflated circulating supply of SHIB (currently standing at roughly 550 trillion) is expected to decrease drastically after the launch of the layer 2 product. This could contribute to making SHIB a good investment moving forward.

Shiba Inu ecosystem coins overview:

• SHIB is the main token of the Shiba Inu ecosystem. It is an ERC-20 token that can be used to make payments, stake, and provide liquidity. Every Shibarium transaction burns SHIB.
• BONE is the governance token of the Shiba Inu ecosystem. It can be used to vote on proposals and participate in the decision-making process. It is also used for Shibarium gas fees.
• LEASH is a rebase token that is pegged to the price of Dogecoin. It is designed to provide holders with exposure to the Doge price without having to hold Doge directly.

How will Shibarium impact the price of SHIB? Shiba Inu price prediction 2023-2025

Even though SHIB won’t be the gas token of Shibarium, it will still be an integral part of the ecosystem and will likely see its value rise after the launch. While many might still see it as a memecoin, Shibarium can help SHIB show that it is more than just the regular pump-and-dump scheme, like most meme coins, adding to its utility. If you want to learn more, give our overview of the main arguments for and against Shiba Inu’s price going up a read.

Our automatic prediction algorithm forecasts major SHIB price fluctuations over the next 12 months.

According to our Shiba Inu price prediction, the price of SHIB is expected to undergo some massive swings in the next two years, culminating in a multi-year high of $0.00005219 in October 2024. Keep in mind that this prediction is based on a snapshot of technical indicators in early September 2023, and could change considerably over time.

In any case, the launch of Shibarium is one of the main reasons why the price of SHIB could reach 1 cent, 50 cents, or even $1 in the long term and help Shiba Inu establish itself as one of the leading blockchain projects.

The bottom line: Shibarium could revitalize the Shiba Inu ecosystem

One of the things to look forward to as we move further away from the mainnet launch is the fact that a variety of projects in the Shiba Inu ecosystem, like Shib Metaverse and Shiboshis NFTs, could attract more users thanks to Shibarium. The reason for this is that the high cost of transactions, not to mention slow speed, is one of the prohibitive factors when it comes to demanding decentralized applications on Ethereum. Shibarium could alleviate that congestion and enable the Shiba Inu ecosystem to grow without technical limitations holding it back.

However, it will likely take months, if not years, before we’ll see Shibarium make a significant impact. Still, the launch of Shibarium means that the development in the Shiba Inu ecosystem is strong, rejecting the claim that Shiba Inu is dead.