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The Shiba Inu Ecosystem
To answer the question of what is Shibarium, you need to understand its relationship with the Shiba Inu coin
Shiba Inu, the ‘meme-themed’ cryptocurrency has become famous in the last year due to its huge price rallies. It is an ERC-20 token, that runs on the Ethereum blockchain. Dubbed the ‘Dogecoin killer’, SHIB got an impressive gain of almost 49,000,000% from midnight of 1/1/2021 till the close of the year.
The opening price of SHIB in 2021 was $0.000000000073 and was trading at $0.000033 by the close of the year. At some time, the coin was trading among the 10 largest cryptocurrencies in market valuation
Shiba’s success has a relationship with the continuous innovations that the network keeps introducing. They are not lonely helping the coin to grow in value but also dropping the meme tag that is associated with coins that lack value.
Creation of Shiba Inu Coin
The Shiba Inu cryptocurrency creation comes from an anonymous developer known as Ryoshi. According to the available information, Ryoshi aimed to create a completely decentralized token that is run 100% by its community.
To achieve this, Shiba runs on the ‘Ethereum blockchain’. However, this means that challenges that exist on the Ethereum network such as high gas fees also affect Shiba coin directly.
Gas fees on the Ethereum blockchain arise from transaction’s congestion on the network. The more congested the network is, the higher the gas fees.
Ethereum has a processing limit of 15 transactions per second. Any increase in the transactions results in increasing gas fees.
To solve the scalability issue, which is part of the “Scalability Trilemma”, developers are creating layer 2 solutions to help in growing the transaction limit and in return lower the gas fees.
Among such developments in 2022 is the creation of Shibarium by the Shiba network. It is a layer 2 solution targeting to give Shiba Inu investors a seamless experience through faster speeds and lower transaction costs.
What is Shibarium?
In May 2021, Ryoshi proposed the idea of Shibarium, a layer 2 blockchain that will sit on top of the Ethereum blockchain. According to Ryoshi’s blog post, “The line between an L2 and own blockchain is thin, I mean what is the difference really between Matic L2 and BSC? Both run the EVM. “
Relationship between a Layer 2 Chain and a Layer 1 (Main) Blockchain
An L2 is a blockchain that sits on top of a main/L1 blockchain. Layer 2 chains process transactions faster, thus reducing the workload on L1 blockchains.
A reduction in transactions on a blockchain translates to low gas fees since they arise from the number of transactions on a blockchain.
According to a tweet by Unification Foundation; Shibarium will allow for “fast, low-cost transactions that are optimized for gaming”. This is one example showing the benefits of Shiba having its own layer 2 blockchain.
A connection (e.g., a channel) between a L2 and the corresponding Layer 1 chain exists to allow syncing of information. Transactions on an L2 happen in layers.
Their processing and recording happens on L2. After this, the permanent record keeping is on the layer 1 blockchain.
How Does Shibarium Work?
In the case of Shibarium and Ethereum, transactions are held in Shibarium, while the final settlements recording happens Ethereum blockchain.
According to Ryoshi’s Medium blog post, Shibarium developers will consider using BONE as the primary pair token. The reason for using BONE instead of Shiba is that BONE will have a fair and “0” start in which the developers will not have to be concerned about over-arching “whale bags”.
SHIB and LEASH holders can use their token holdings to yield BONE returns on ShibaSwap providing them with BONE tokens to pay gas fees on the Shibarium network.
Shibarium Project Status
In May 2021, Ryoshi stated in a blog post that Shibarium was one of the upcoming projects in the Shiba Inu ecosystem roadmap and highlighted an engagement with a competent blockchain team to build the Shibarium network and fully decentralize it.
In December 2021, Eric M, one of Shibarium’s developers gave a hint the launch of Shibarium will be soon via a discord post.
During the conversation, Eric M said that ‘a timeline is not necessary when you have faith in a project’. He also talked about how users on the SHIB process pre-swap were successful post-swap.
This is in line with Ryoshi’s blog post that talks about SHI, a stable coin project pegged to 1c that is also part of the Shiba Inu ecosystem roadmap. The plan is that SHI will run on Shibarium. However, depending on its launch, it could also run on Ethereum before Shibarium gets ready.
In February 2022, we learnt that the official developing team for the Shibarium project is the Unification Foundation. In a blog post on Medium Unification Foundation wrote, “In addition to the extensive Network, Protocol & new partnership developments discussed above, Unification Foundation is proud to continue development of Shibarium, the next prominent L2 in partnership with the Shib Army, enabling rapid low-cost transactions optimized for gaming.”
Unification has previously collaborated with Shib developers in the ShibaSwap launch. Their collaboration was announced via a tweet by Shytoshi Kusama in June 2021.
What is the Shibarium Release Date?
On their 4th February blog post on Medium, Unification Foundations stated, “While the scale of the project doesn’t allow a definitive timeline to be released as of yet, the second version of Shibarium’s private testnet is live and under optimization across both teams with plans of a public testnet release to come very soon.”
Currently, the public cannot access Shibarium’s testnet until the public testnet launches. The team had plans to launch the Shibarium project before the release of Ethereum 2.0. With plans to release the Ethereum 2.0 in June, we can expect Shibarium’s launch to happen before that date.
Shibarium is likely to become a game-changer by ensuring Shiba has its blockchain. This will help in making the coin competitive through accelerating innovation and reduction in transaction costs.
On the price, Shibarium could act as a driver in the continuation of its price rallies.