Crypto Basics

What is Shibarium and How does it Work?

Know everything about Shibarium and its overall impact on the SHIB ecosystem in this descriptive guide.
Token Metrics Team
10 Minutes
MIN

In the world of cryptocurrency, new innovations and technologies continue to emerge, captivating both investors and enthusiasts alike. One such development that has recently gained significant attention is Shibarium.

Shibarium, the highly anticipated Layer-2 blockchain solution for the Shiba Inu ecosystem, has caught the attention of the crypto community. As a scalable, secure, and low-cost platform, Shibarium aims to revolutionize the way Shiba Inu and its associated tokens operate. 

In this comprehensive guide, we will delve into the details of what Shibarium is, how it works, its development history, and the potential impact on the Shiba Inu ecosystem.

What is Shibarium?

Shibarium is a Layer-2 blockchain solution built on top of the Ethereum network, designed to address the scalability issues that have plagued the growth of the Shiba Inu ecosystem since its inception.

High gas fees and slow transaction speeds on the Ethereum network have hindered the adoption and usability of Shiba Inu's decentralized applications (dApps) like ShibaSwap, limiting its potential to attract and retain new users.

By launching its own network, Shibarium aims to overcome these challenges, enabling the Shiba Inu community to expand its ecosystem while enjoying the security of the underlying Ethereum network.

With faster transaction speeds and lower fees, Shibarium has the potential to transform Shiba Inu from a meme coin into a robust, versatile platform with a wide range of use cases.

The Shiba Inu Ecosystem

Before diving into the details of Shibarium, it's important to understand the Shiba Inu ecosystem and the various tokens that comprise it. The Shiba Inu ecosystem consists of several tokens, including SHIB (the original token), LEASH, BONE, and the yet-to-be-released TREAT. Each token serves a unique purpose within the ecosystem:

  • SHIB: The original Shiba Inu token, often referred to as the "Dogecoin Killer," forms the foundation of the Shiba Inu ecosystem.
  • LEASH: Designed as a limited supply token, LEASH serves as a rewards token and provides holders with early access to SHIB land sales.
  • BONE: A governance token, BONE plays a crucial role in the Shibarium network, acting as the native gas token and providing staking rewards.
  • TREAT: An upcoming rewards token, TREAT will be distributed to BONE stakers and validators once they reach specific milestones.

These tokens, along with the various dApps and platforms built around them, form the backbone of the Shiba Inu ecosystem.

Why Shibarium?

The decision to develop Shibarium stemmed from the limitations of the Ethereum network, which hindered the growth and adoption of the Shiba Inu ecosystem.

The high gas fees and slow transaction speeds on Ethereum have made it difficult for users to access and utilize Shiba Inu's dApps, such as ShibaSwap, the platform's native decentralized exchange (DEX).

By creating a Layer-2 solution, Shibarium aims to address these issues, offering faster transaction speeds, lower fees, and a more user-friendly experience.

Furthermore, the development of Shibarium aligns with the original vision of Shiba Inu's anonymous founder, Ryoshi, who envisioned a decentralized, community-driven platform that empowered users and developers to create and explore new applications.

How does Shibarium work?

Here is a step-by-step process explaining how Shibarium works:
Consensus Mechanism

Shibarium employs a Proof-of-Stake (PoS) consensus mechanism, which relies on validator nodes staking BONE tokens to validate transactions and secure the network. This approach is more energy-efficient than the Proof-of-Work (PoW) consensus mechanism used by networks like Bitcoin and offers increased scalability and faster transaction speeds.

Ethereum Virtual Machine (EVM)

Shibarium utilizes the Ethereum Virtual Machine (EVM), which allows developers to easily deploy Ethereum-based smart contracts and dApps on the new network. This compatibility ensures a seamless migration of existing dApps and fosters the rapid development of new applications within the Shiba Inu ecosystem.

Gas Fees and Tokenomics

With BONE serving as the native gas token of the Shibarium network, transaction fees will be significantly lower compared to those on the Ethereum network. This reduction in fees aims to make the Shiba Inu ecosystem more accessible and user-friendly, encouraging broader adoption and usage.

Shibarium's Development History

Shibarium's development history can be traced back to its inception as a revolutionary layer-2 solution specifically designed for the Shiba Inu ecosystem. This ongoing journey of development and refinement signifies a noteworthy milestone in the continuous evolution of the Shiba Inu ecosystem, encompassing various significant stages.

Ryoshi's Vision

The concept of Shibarium can be traced back to May 2021, when Shiba Inu's founder, Ryoshi, first hinted at the idea of a dedicated blockchain for the Shiba Inu community. In a now-deleted blog post, Ryoshi envisioned a network where developers and users could create and explore applications, expanding the Shiba Inu ecosystem beyond its meme coin origins.

Shytoshi Kusama's Leadership

Under the leadership of Shytoshi Kusama, the lead developer of the Shiba Inu project, the development of Shibarium has been kept under wraps, with few details released to the public. This secretive approach has only added to the anticipation and excitement surrounding the project, as the Shiba Inu community eagerly awaits its launch.

The Puppynet Testnet

In March 2023, the Shibarium beta testnet, dubbed "Puppynet," was released, allowing users to test the network's functionality and deploy smart contracts in a risk-free environment. The Puppynet testnet represents the final stage of development before the official mainnet launch of the Shibarium blockchain.

The Impact of Shibarium on Shiba Inu

The launch of Shibarium is expected to have a significant impact on the Shiba Inu ecosystem, bringing new utility to its tokens and providing a scalable, secure platform for the community to grow and innovate.

The SHIB Burn Mechanism

One notable feature of Shibarium is its unique burn mechanism for SHIB tokens, which aims to increase the token's scarcity by permanently removing tokens from circulation. With a total supply of one quadrillion tokens, SHIB has the largest token supply of any cryptocurrency on the market

The Shibarium burn mechanism takes 70% of every transaction base fee, which is collected in BONE tokens, and uses them to purchase SHIB tokens from the market. These purchased SHIB tokens are then sent to a burn address, effectively reducing the token supply and increasing its scarcity.

Benefits and Risks of Shibarium

As with any new technology, there are both benefits and drawbacks to the Shibarium network. Understanding these pros and cons is crucial for determining the potential success of Shibarium and its impact on the Shiba Inu ecosystem.

Benefits of Shibarium

  • Scalability: Shibarium's Layer-2 solution offers significantly faster transaction speeds and lower fees compared to the Ethereum network, making it more accessible to users.
  • Compatibility: The network's EVM compatibility allows for seamless migration of existing dApps and rapid development of new applications within the Shiba Inu ecosystem.
  • Token Utility: Shibarium brings new use cases and utility to all tokens within the Shiba Inu ecosystem, including NFTs.
  • SHIB Burn: The unique SHIB burn mechanism has the potential to positively impact SHIB's tokenomics, reducing the token supply and providing constant buy pressure.
  • Differentiation from Meme Coins: The launch of Shibarium sets Shiba Inu apart from other meme coins, such as Dogecoin, by offering a more robust and versatile platform with a range of use cases.

Risks Associated with Shibarium

  • Layer-2 Competition: With competitors like Arbitrum, Polygon, and zkSync, the Ethereum Layer-2 market is highly competitive, and it remains to be seen whether Shibarium can differentiate itself from these more established solutions.
  • Performance Uncertainty: Key performance metrics, such as transaction throughput and finality, are still unclear, raising questions about the network's capabilities.
  • Lack of Developer Incentives: Unlike other networks that offer ecosystem grants to encourage development, Shibarium has yet to provide any funding for developers, which may limit the range of applications available on the platform.

Shibarium Release Date

According to Shytoshi Kusama, the lead developer of SHIB, the launch of Shibarium is anticipated within a timeframe of two to three months. This indicates that the new layer-2 solution for SHIB could potentially be introduced between June (Q2) and August (Q3) of this year. Nevertheless, Kusama has not provided a specific date for the release.

Conversely, Lucie, a prominent influencer associated with SHIB, recently mentioned that the launch timeline is contingent upon progress and audits.

Lucie relayed Kusama's statement that audits will be conducted. Based on Lucie's tweet, it suggests that the network is presently undergoing safety testing to ensure its robustness.

Frequently Asked Questions

Q1. What is the purpose of the Shibarium?

Shibarium is a Layer-2 blockchain solution designed to address the scalability issues of the Ethereum network and expand the Shiba Inu ecosystem.

Q2. How is Shibarium different from Shiba Inu?

While Shiba Inu is a cryptocurrency that can be traded on an open market, Shibarium is a network capable of hosting dApps, smart contracts, and facilitating transactions.

Q3. Will Shiba Inu's value increase after the launch of Shibarium?

There are no guarantees that the value of Shiba Inu (SHIB) will increase following the launch of Shibarium. While the platform's launch is widely seen as a positive development for the Shiba Inu ecosystem, the crypto market can often react unpredictably. It is essential to conduct your own research before investing in any cryptocurrency.

Q4. Who is developing Shibarium?

Shytoshi Kusama is the lead developer of the Shibarium blockchain.

Q5. How much SHIB will be burned by the Shibarium network?

The Shibarium burn mechanism aims to take 70% of transaction base fees and use those fees to buy SHIB tokens directly from the market. The purchased SHIB tokens are then automatically burned and permanently removed from the supply.

Q6. Is Shibarium different from Shiba Inu?

Yes, Shibarium is distinct from Shiba Inu. Shiba Inu is a cryptocurrency token, while Shibarium is a layer-2 solution being developed for the Shiba Inu ecosystem

Q7. Can I participate in Shibarium if I don't hold Shib tokens? 

While Shib tokens are essential for accessing the full range of features in Shibarium, some limited functionalities might be available to non-Shib holders. However, it is advisable to hold Shib tokens to unlock the ecosystem's complete potential.

Conclusion

Shibarium presents an exciting avenue for Shib token holders to actively engage in the world of decentralized finance. Through yield farming, staking, and other DeFi activities, Shibarium offers users the opportunity to maximize their holdings and earn passive income.

By participating in liquidity pools and staking Shib tokens, users can unlock various rewards and contribute to the network's growth and security. As Shibarium continues to evolve, it is important for users to stay informed about the latest updates and developments within the ecosystem. 

Keep an eye on official announcements and community discussions to ensure you make informed decisions regarding your Shib investments.

Disclaimer

The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website's content as such.

Token Metrics does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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Managing Risks

Risk management is a fundamental aspect of successful cryptocurrency trading, and trading pairs provide various avenues for managing risk through diversification and hedging. By spreading investments across different crypto assets and trading pairs, traders can reduce their exposure to adverse market movements affecting a single digital asset. Risk management often requires a balanced approach, combining strategies such as setting stop-loss orders, controlling position sizes, and using stablecoin pairs for stability to help mitigate potential losses and protect capital. Effective risk management enables traders to preserve their portfolios and maintain a balanced approach to trading, aligning with their risk tolerance and long-term trading goals within the crypto market.

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Introduction
With Bitcoin in price discovery and meme coins dominating short-term trends, crypto markets in 2025 are in a new phase of the cycle. At Token Metrics, we’ve been tracking smart money, emerging tokens, and high-conviction sectors like DeFi, AI, and meme assets. This post breaks down what we’re seeing—and how traders are adapting.

Current Market Sentiment

Bitcoin remains strong, with ETH and SOL following closely. Our models suggest:

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  • SOL base case: $630


  • Market cap projection: $8–14 trillion

Despite regulatory noise, crypto’s fundamentals—liquidity, user growth, and capital rotation—remain bullish.

Meme Coin Resurgence

Meme coins are leading short-term market action. Among the top gainers:

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While volatility is high, top-performing meme coins on new chains often yield strong short-term returns—especially when backed by rising ecosystems like SUI.

Smart Money Tracking with Nansen

We’ve doubled down on using platforms like Nansen to follow profitable wallet cohorts. These tools help us identify early-stage tokens with smart money inflows. Key indicators:

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We also track wallet activity over time to confirm whether top-performing wallets are accumulating or exiting positions.

Deep Dives Over Speculation

While meme coins grab headlines, we’re also analyzing sectors with long-term viability:

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We balance high-risk meme trades with deep fundamental research into projects gaining traction on-chain and in product development.

Sector Watch: Hedera Ecosystem

The Hedera (HBAR) ecosystem recently saw a 5x spike in DEX volume. Tokens like:

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We’re not rotating capital aggressively here yet, but we’re watching closely for sustained on-chain activity.

Capital Flow Outlook

Altcoin rotation often follows BTC consolidation. With BTC and ETH leading the charge, we expect:

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Internal price models and momentum indicators support further upside, assuming macro remains stable and regulatory conditions don’t sharply deteriorate.

Conclusion

The current cycle rewards those who combine quantitative analysis, on-chain tracking, and strong narrative awareness. Whether trading LoFi for a quick flip or accumulating tokens like Fractal AI or USUAL for a thesis-driven hold, the key is staying ahead of trends without abandoning discipline.

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