Glancing through Coingecko’s coin list, one has no difficulty to spot a confounding truth that two dog coins — Doge and Shiba Inu ranking 11th and 14th respectively, are so big that they overshadow most other “legit” tokens or projects. How is that possible? Contrary to common belief that memes are outright speculation that moon in a bull market and die in a bear market, these dog coins seem to have a solid footing and incredible strength even amid extreme fear of a bear market. Let’s dive in and see how they become so big and what implications they offer on token valuation and prospects.
The first dog coin Doge has its own blockchain. It was created in 2013 as a “fun” alternative to Bitcoin. It was based on the meme of a Japanese dog “Shiba Inu” which went viral back then. The initial founders Billy Markus and Jackson Palmer created this coin and the blockchain as a joke within a few hours and never intended to be serious, having no consideration of security and scalability. In fact, they both sold out very early and Billy sold all his Dogecoins to buy a Honda in 2015. Ironically, the “fun coin” became popular on Reddit and Twitter and a community was formed. And probably beyond the founders’ wildest imagination, many celebrities and Elon Musk, the richest man in the world, hopped unto the bandwagon of Doge. When Elon became the “Doge father”, Doge had a 10x rally within 3 months. Elon is mining Dogecoin and bought some for his youngest son. He frequently tweets about Doge and causes price spikes. We can pretty much expect him to keep throwing out memes and jokes promoting Doge in a foreseeable future. In essence, we can summarize Doge’s life journey as having a fun token that spurs a fun community, creating more fun memes that pumps the token price, attracting more people into the community including powerful figures like Elon Musk, generating more memes that further reach millions. The sheer attention, influence and capital inflow into Doge is mind-blowing, not only alluring speculators but also attracting serious developers to deploy serious upgrades on the blockchain. Very interestingly, the initial founder Billy came back and bought Doge again after Elon joined.
Like Doge, the second largest dog coin Shiba Inu is nothing short of a legend. Although SHIB is an alternative to Doge and certainly got the inspiration from the same meme, it had a serious purpose when started. It was designed as “an experiment in decentralized spontaneous community building”. The founder Ryoshi believes that a decentralized community has the potential to beat any centralized team in building something great. Since its inception in Nov, 2020, the SHIB coin has gone up 369,052x, despite a steep correction of 76% from its all-time-high in Oct, 2021. This jaw-dropping price pump within a year has certainly proven the formidable power of meme embodied by a decentralized spontaneous community. The founders did not reserve any coins for themselves or the team/admin, but everyone had to buy from the open market (half of all tokens went to the Uniswap pool). The idea is to make every participant/token holder equal, and no one is treated differently in the community. They sent the other half of the total supply to Vitalik Buterin, the Ethereum co-founder, who later donated 20% of those (worth billions) to charity (Indian Covid Relief fund and others) and burned the rest of it (80%) permanently. This action made headlines and in spite of being seeing as a rug pull by many, this actually strengthened the brand image of Shiba and associated it with a good cause.
Ryoshi made it super clear from the beginning that no one is in charge or responsible for the fate of Shiba and he himself is nobody and not important. He wants to be pure and unbiased, not to be held accountable for where Shiba is going but make everyone else in the community responsible for themselves. Like Doge founders, he also sold out his coins early. And when people ask him questions with expectations, he always kicks it back to them by asking “when are you going to do this thing you just asked me?” In this way, he attempts to rid people of the entitlement mentality, and inspire them to stand up for Shiba and take the responsibility of making Shiba great. He also consistently prioritizes decentralization, as he thinks that centralized teams move fast at the expense of long-lasting trust, resulting in quick short-term performance but loses the long game.
Unlike Doge, SHIB is an ERC20 token created by deploying a smart contract on the Ethereum blockchain. Being on Ethereum has given Shiba many advantages over Doge such as programmability and access to DEFI. The Shiba community is very embracive of innovations happening in the crypto space. Indeed, Shiba has made great progress in extending its functionality and ecosystem with additional tokens (LEASH and BONE), NFTs, and a DEX (ShibaSwap Exchange). It has a very ambitious blueprint to build its own side-chain called “Shibarium”, where a whole new Shiba economy will be unleashed with a full-fledging financial system including “SHI” — an algorithmic stablecoin that serves as a global exchange of value, plus a Metaverse made of NFTs and gaming. Shytoshi Kusama, the leader behind ShibaSwap, is spearheading the Shiba version of the Shiboshi game by landing a AAA gaming studio and a prominent game developer William David Volk to lead the charge. There is no doubt that Shiba is on full steam with an aggressive roadmap and precise execution, no wonder why the top 10 ETH wallets have been accumulating SHIB recently. It is now the 3rd largest position of these whales.
No matter how people like to dismiss these dog coins as speculation or jokes, one cannot deny the fact that they have successfully amassed a robust community and attracted loyal fans including highly influential people. The community is driving changes, updates, and new developments. Their valuations have gone up to the point where most people including the initial founders could hardly imagine at the beginning. As surprising as these stories unfold, I can’t help searching for clues alluding to their extraordinary paths. So, what are the implications and insights we can glean from their success?
1. Never underestimate the power of memes. Good memes are going viral for good reasons. In this case, Shiba Inu, the dog image is loved by people. It symbolizes the everlasting theme of love and bond between humans and dogs. It is a message that anyone in the world can relate to -meaning the target market is vast and unbound. Powerful memes are extremely simple but can arouse a strong emotional response from people. Emotionally charged messages are potent and memorable. For as long as humans exist, the love of dogs continue, the love of dog memes continue, and the love of dog coins continue. You may have a complex idea that is intellectually appealing, but if you cannot simplify it into a meme that stir up people’s emotions, it is unlikely to gain widespread support.
2. Decentralized community is pivotal. For both Doge and Shiba, founders stepped back, sold out early and let the community run the show. Perhaps people have more trust when the founders cannot dump on them or perhaps, they do better with greater autonomy. To some degree, getting founders out of the way and reinforcing the pure love of the dog creates a better bonding of the community. People are probably more motivated to promote and defend the dog than the founders.
3. The founders set the initial vision or theme, which is carried out as culture in the community. Doge founders created it for fun. The fun culture attracts and retain people in the community. Shiba founder launched SHIB for decentralized spontaneous community, and he is holding the community members responsible for SHIB and encouraging the self-actualization of people for the public good of the community. The community inherits the vision of the founders and share a coherent social construct.
4. Let new leaders/influencers rise to challenges and execute their ideas. How Elon became the “Doge father” and how Shytoshi drives Shiba development exemplify this decentralized nature of leadership. Any passionate, talented, or influential person can take leadership and have a big impact on the project. Decentralization does not mean chaos or anarchy, but opportunities and responsibilities for everyone to lead and contribute in their own way.
5. Borrow and tweak proven ideas/products from other projects for its own use. Shiba is moving fast on integrating DEX, NFTs, algo-stablecoin, gaming and Layer 2 into its ecosystem. None of these are ingenuine ideas they invent, but they can quickly fork them and make their own versions. Thanks to the decentralized community and a large market cap manifesting financial strength and social influence, the Shiba army is poised to capitalize on a windfall of opportunities.