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Shiba Inu Team Warns of New Scams: Will Investors Flee to Safer Assets?

Last Updated June 3, 2024 1:59 PM
Eddie Mitchell
Last Updated June 3, 2024 1:59 PM
Key Takeaways
  • Shiba Inu admins have warned of fraudulent SHIB-based tokens launching on the network.
  • Shibarium network activity is in steep decline with new daily transactions down under to 10,000 from over 6 million in January.
  • The SHIB token price and market cap have more than doubled since March 2024 despite the Shibarium network’s decline.

The admin team at Shiba Inu (SHIB) has issued yet another warning about potential scams within the Shibarium ecosystem.

Though the price of SHIB and other ecosystem tokens remains strong, Shibarium network activity seems to suggest that users are losing faith and moving their assets away from what could be perceived as a vulnerable network.

Shibarium Scams

In a warning posted to the Shiba Inu Discord, admin DaVinci issued a staunch warning to SHIB community members, warning them of malicious actors who are attempting to scam and disrupt the SHIB ecosystem.

As per DaVinci’s post, “deceitful” individuals are launching SHIB-based tokens by exploiting the Shiba State and Canine code. In addition, they are adding the official shib.io website link in the marketing materials for their scams. DaVinci adds :

“We urge you to exercise caution and conduct any comprehensive research before engaging with any tokens.”

Unfortunately, the SHIB team’s hands are tied and can only issue warnings and guidance.  Due to the network’s decentralized nature, they’re unable to ban tokens issued on Shiba Inu’s decentralized exchange (DEX).

Shibarium Sentiment

So far throughout 2023 and 2024, the Shiba Inu admins have posted several warnings about scams, phishing attacks, frauds , and other nefarious activities going on within their ecosystem.

In February/March, when Solana’s (SOL) memecoin mania kicked up bullish sentiment amongst altcoin investors, SHIB and other Shibarium tokens were swept up in the hype.

This saw several poorly managed projects and rug pulls making their way to the Shibarium who were eager to capitalize on the hype – resulting in failures and financial losses for users.

In their bid to become a standout memecoin, the Shiba Inu project has attracted its fair share of negative attention. Though it is working to embody the spirit of decentralization and community-driven governance, it may be failing to retain users as it appears reluctant to make the necessary changes to protect users and investors.

SHIB, LEASH, BONE

The Shibarium is Shiba Inu’s official Layer-2 network, comprising a broad suite of services and products, through which users can leverage SHIB and other ecosystem utility tokens Bone Shibawap (BONE) and Doge Killer (LEASH).

Earlier in March the SHIB  token more than tripled in value. This quadrupled its market cap from around $5 billion to a peak of $21 billion in a matter of days, just a few billion away from Dogecoin (DOGE). This briefly saw SHIB enter the top 10 cryptos by market capitalization, overtaking the likes of Polkadot (DOT), Chainlink (LINK), and others. It has since fallen behind Toncoin (TON) to 11th position.

SHIB token price chart.
(Source: CoinMarketCap)

Doge Killer or LEASH, is a utility token that provides holders with rewards, reduced fees, better borrowing rates, exclusive rights, and other ecosystem perks. It has a limited supply of 107,466 tokens and briefly quadrupled in value before correcting. At a price of $453.64 LEASH  is the ecosystem’s most valuable token.

Price chart of Doge Killer (LEASH)
(Source: CoinMarketCap)

As the network’s foremost utility token, BONE is used to pay transaction fees, provide liquidity to the ShibaSwap DEX, and grant governance rights to holders. Though its price activity tracked with SHIB and pushed upward to $1.20  in March, it didn’t quite hit the same lofty peaks or maintain any of these gains.

Bone ShibaSwap (BONE) token price chart.
(Source: CoinMarketCap)

Seemingly, investors aren’t moving away from SHIB or LEASH. But as evidenced by BONE, users and investors may be losing faith in the Shibarium ecosystem itself and moving their assets away from the network.

Shibarium in Decline?

According to data from Shibariumscan , the Shiba Inu Layer-2 network has seen a sharp decline in network activity.

Though the cumulative number of Shibarium accounts has risen steadily and almost doubled to 114k since January, the number of daily active and new accounts accounts tells another story.

Shibarium active accounts in decline.

(Source: Shibariumscan)

Perhaps most telling of all is the gigantic decline in new transactions, which has fallen from over 6 million to under 10,000 in the space of 6 months.

Chart showing number of new transactions on Shibarium
(Source: Shibariumscan)

The Shibarium ecosystem appears to be underperforming when weighed up against the billions in market capitalization it commands.

Concrete Community

The team at Shiba Inu has put in a lot of work to differentiate itself from other memecoins by being extremely proactive with ecosystem developments and community engagement.

For all of its faults, Shiba has galvanized a devoted community over the years known as the “SHIB Army ” who regularly make as much noise as they can on across X, Discord , Reddit, Telegram and every other Internet platform you can think of.

Though the Shibarium network activity numbers don’t quite prove that the Shiba Inu ecosystem and tokens are in any way ‘dead’ – concern around scams may be keeping new users away from the network.

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