Shibarium is the first blockchain created for the memcoin ecosystem

Shiba Inu was the first memcoin issued as a token on the Ethereum network. The memcoin team later created its blockchain called Shibarium. This expanded the Shiba Inu ecosystem, though it remained a token on the Ethereum blockchain.

What is Shibarium?

Shibarium is a Layer-2 or L2 solution created by the Shiba Inu team to scale the underlying Ethereum network. The Shibarium blockchain, like any other L2 network, aims to solve two significant problems of Ethereum:

low bandwidth, which leads to pretty slow transactions;
high transaction costs.

Although in the second half of 2024, the load on the Ethereum network has significantly decreased, as has the cost of fees, and transaction speeds have increased, L2 solutions are still outperforming the underlying blockchain on this metric for now.

Shiba Inu's ecosystem projects (ShibaSwap decentralized exchange, TheShibMetaverse metaverse, and Shiba Eternity game), besides the Ethereum blockchain, now support the Shibarium L2 blockchain, which provides faster and cheaper transactions.

How does Shibarium work?

Shibarium processes transactions outside the Ethereum network, reducing the underlying network's load. In this respect, Shibarium differs significantly from other Ethereum-based L2 solutions.

There are two types of nodes in the Shibarium blockchain:

validators (Heimdall);
block producers (Bor).

This is the main feature of the Shibarium L2 network. The fact is that Bor block producers are fully compatible with the Ethereum Virtual Machine (EVM) and essentially have a similar consensus mechanism. Heimdall validators are based on Tendermint, the consensus algorithm used in the Cosmos blockchain.

Shibarium fulfills several critical roles in the Shiba Inu ecosystem:

Expands the capabilities and use cases of the Shiba Inu cryptocurrency, as well as other tokens in the ecosystem: BONE, BAD, PYRITE, KOYO, and others;
Increases the speed and efficiency of transactions by reducing their processing time;
Reduces commission costs for various types of transactions: transfers, swaps, buying and selling NFTs, loans in credit DeFi protocols;
Enables developers to create decentralized applications that are meaningful and useful to the Shiba Inu community.

Shibarium ecosystem

As of September 2024, Shibarium's assets blocked in DeFi protocols (TVL) are only $1.24 million, while at its peak in May this year, it reached only $3.9 million. By comparison, the TVL of the Dymension protocol is $6.1 million, although it is not even among the top 100 ecosystems in the crypto market.

The main participants of the Shibarium ecosystem are Shiba Inu developers' projects:

DEX exchange ShibaSwap;
Launchpad platforms Dogpad and ShibPad;
Shibarium Name Service (similar to Ethereum Name Service or ENS);
Shib Chomp secure distributed storage solution;
Prodigy platform with a sniper bot (allows decentralized exchanges to redeem tokens after pool launch before others);
Treat project, providing a stablecoin of the same name;
NFT projects such as Shiboshi.

Notably, each decentralized application has its token. For example, Dogpad has DOGP, and Shibarium Name Service has SNS.

Otherwise, the Shibarium ecosystem only includes little-known DeFi protocols, mostly decentralized exchanges. Moreover, only two of them have TVL exceeding $300,000. Nevertheless, since the beginning of 2024, Shibarium's total TVL has grown about 1.5 times.

Shibarium blockchain cryptocurrency

Oddly enough, the main asset of Shibarium's L2 network is not the Shiba Inu token (SHIB), which is the second leading memcoin and among the top 20 crypto assets, but the Bone cryptocurrency (BONE). While Shibarium's L2 network does not have a well-developed ecosystem and has very low liquidity, its native cryptocurrency, BONE, does not have the smallest capitalization. As of September 2024, it is worth about $98 million.

The BONE cryptocurrency is used for staking and paying rewards to validators. However, you need to stack at least 10 000 BONE to become a validator.

According to CoinMarketCap data, the maximum possible number of BONE tokens is 250 million, of which almost 230 million are already circulating on the crypto market (92% of the issuance limit).

The price of BONE reached its all-time high (ATH) in September 2021, at the peak of the crypto market's bull rally (bull run). As of September 2024, the BONE cryptocurrency price is almost 99% below its ATH at $0.42.

Conclusion

Despite its small market cap, Shibarium has a somewhat developed ecosystem.

The Shiba Inu cryptocurrency, which is among the largest assets in the crypto market, could significantly contribute to the further development of Shibarium and its decentralized projects.

Memcoins, in general, play an important role in the crypto market, and in this case, there is a ready-made ecosystem for them that could see a significant growth boost on the back of the meme trend.