One of the largest altcoin projects in the cryptocurrency market, backed by a loyal community of $SHIB holders, Shiba Inu has introduced several developments since its inception; From collections of non-fungible tokens (NFT) to decentralized exchanges like ShibaSwap, the SHIB army has been patiently awaiting the release of Shibarium.
Shibarium is an upcoming Layer 2 solution that aims to improve the Shiba Inu ecosystem by providing faster transactions at a lower cost, among other key improvements. However, there are still many questions about the release and usefulness of Shibarium.
Why Shibarium?
The current Shiba Inu token runs on the Ethereum network, which despite being a highly secure and decentralized blockchain, its main disadvantages are scalability issues and low throughput.
While Ethereum has transitioned from Proof-of-Work (PoW) to Proof-of-Stake (PoS) via the merge, that doesn’t mean scalability and low throughput issues are resolved; The main idea behind the transition was to introduce new token issuance mechanisms, a better data processing system and new tokenomics that will benefit the chain in the long term. Therefore, layer 2s and sidechains are still an important part of the Ethereum ecosystem.
Before we dive in, let’s quickly refresh what layer-2s and scaling solutions are, as they are useful for understanding why the Shiba community is building Shibarium.
What is a layer 2?
A layer-2 refers to a secondary chain built on top of a main chain. When we speak of a blockchain as such, we are technically referring to a layer-1, which can also be referred to as the backbone, base layer, layer-1, etc. Therefore, a layer-2 is a chain that works together with the main chain.
Layer-2s are so-called scaling solutions, a technology that can improve a blockchain in many ways, but all have the main goal of reducing network congestion on the main layer. There are different types of scaling solutions, mainly:
- Sidechains: independent blockchains that are compatible with another main blockchain. A famous example is Polygon, a sidechain that is Ethereum Virtual Machine (EVM) compatible. Although it is autonomous, it allows developers and users to port their projects from Ethereum to Polygon and vice versa.
- State Channel: Peer-to-peer protocols that allow two parties to conduct transactions outside of the Ethereum network and send the final results to the blockchain.
- Layer 2: A scaling solution that takes transactions off the network to execute on the Layer 2s chain, and then sends the transaction data back to the main blockchain in batches. Two popular examples of Layer 2s are optimistic and zero-knowledge rollups.
In this case, Shibarium is a Layer 2 chain that uses the Proof-of-Stake consensus algorithm. This means that it will be the users who stake part of their tokens to become a validator.
A validator checks the state of the blockchain to process transactions instead of miners using hardware that consumes large amounts of electricity. The global network of computers acting as validators will ensure the decentralization of the blockchain.
How does Shibarium work?
Shibarium will work with Ethereum to process transactions in the Shibarium ecosystem. It will require a large chunk of the transaction load that the Shiba Inu ecosystem is currently bringing to Ethereum to be processed on the Shibarium chain.
In addition, Layer-2 will remove tokens from circulation to reduce supply and increase price. This is known as the token burning mechanism, where tokens are sent to wallets that can only receive but not send tokens, also known as dead wallets.
The SHIArmy has long advocated token burns to reduce the circulating supply of the meme-inspired cryptocurrency, thereby making circulating tokens more valuable when demand is sustained or increases. By the end of 2021, the Shiba Inu community had already burned a total of 410 trillion tokens.
It is not yet known what kind of Layer 2 technology Shibarium will be based on, whether optimistic rollups or ZK rollups.
When will Shibarium be launched?
At the time of writing, there is no official release date for Shibarium. According to the official blog post, developers have been working on the project since April 2022, but there have been no updates on its development. It has been reported that the project will enter the testnet phase via a public beta shortly after release.
In other words, there is a lot of work going on behind the scenes, but nothing official yet. The testnet will allow developers to build and test the tools required for end-user interactions, such as B. Token transfer bridges, wallets, block explorers and more.
History of the Shibarium
Shibarium was first proposed by Shiba Inu’s creator, anonymous developer Ryoshi. However, in the now-deleted blog post, Ryoshi wasn’t sure if it’s a proprietary blockchain or an L2 – but the line separating the two is quite thin: “The line between an L2 and a proprietary blockchain is thin, I what actually means the difference between Matic L2 [Polygon] and BSC [BSC has since rebranded to BNB Chain]”
However, it appears that Shibarium will remain its own Layer-2, according to a blog post from the developers. This means there will be no SHIB 2.0 as it remains connected to Ethereum. Layer-2 requires users to use $BONE to transact on it. In theory, this means greater demand for BONE, the governance token of decentralized exchange ShibaSwap.
Shibarium as a concept has been around since early 2021. What we can find on Twitter is the Shiba community talking about Shibarium being almost ready. But the long wait has unsettled BONE owners.
Source: Twitter
Shytoshi Kusama is the current Shiba project leader. According to Kusama, Shibarium will bring lightning-fast transaction throughput, low fees, and more benefits to anything built on top of it.
FAQ
What is the purpose of Shibarium?
In addition to improving transaction speed and scalability, it serves as the basis for new decentralized applications of all kinds built on top of the new Layer 2, including DEXs, NFT marketplaces and others.
When will Shibarium be launched?
No official date yet. Not only SHIB soldiers are excited to hear from the official developers, but also investors.
What tokens will Shibarium use?
Shibarium will feature a multi-token system consisting of $BONE and $LEASH. The first will be the chain’s utility token and the latter will serve as a liquidity token for users to stake in liquidity pools to earn rewards.
image source
Featured image via Unsplash.
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