Shiba Inu Crypto Gets a Boost From Layer-2 News, But It’s Still Not a Strong Project

  • Shiba Inu (SHIB-USD) is getting off to a hot start in 2023.
  • The deflationary token is being bolstered by promises of a new layer-2 network by developers.
  • Even with a new flashy upgrade, though, Shiba Inu doesn’t prove its worth as a long-term or practical blockchain project.
Shiba Inu crypto - Shiba Inu Crypto Gets a Boost From Layer-2 News, But It’s Still Not a Strong Project

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One of the crypto market’s most polarizing figures is a dog. Shiba Inu (SHIB-USD), a deflationary token that took the market by storm two years ago, is a tale in speculative investing that simply hasn’t gone away yet. In fact, getting into 2023, the Shiba Inu crypto is maintaining a steady upward trajectory. This comes as the crypto’s developers promise a long-awaited new service that could help bump up the practicality of the project. However, for all of its hype and ability to hang on to relevancy, SHIB represents a category of crypto investing that is unsustainable if the market wishes to mature.

First announced in October of 2021, Shiba Inu’s “Shibarium” layer-2 project is poised to be its most grandiose yet. Shibarium is the network’s response to criticism, supposedly making the network more usable than ever before. Essentially, a layer-2. is a blockchain that exists atop another blockchain — in this case, the Ethereum (ETH-USD) chain. Layer-2 networks exist as a way to up the scalability of a network by taking on some of the transaction load. Transactions on Shibarium will theoretically be faster and cheaper than transactions on Ethereum. Its creation should then be a net positive for both Shiba Inu investors and Ethereum users.

While the project has sat simmered for about a year and a half now, developers have provided sporadic updates. This week’s announcement is the best news yet. Developers have announced that the Shibarium test network will be launching soon. Using this, the team can work out the bugs. Then, they can move to release the final product at its yet unspecified date.

Shiba Inu Crypto Heats Up, but Is SHIB Here for the Long Run?

The Shiba Inu crypto is up by about 0.5% on this big news. This gain tacks onto an already bullish start to the year for the project. But, the Shibarium layer-2 will not save SHIB. The project still lacks a use case that will save it during an incoming period of consolidation.

One of the most popular predictions for the crypto market says most cryptos will disappear as the industry matures. Web3 Foundation CEO Bertrand Perez compares this event to that of the dot-com bubble, saying “lots of [companies] were scams, and were not bringing any value and all that got cleared.” And just like with the dot-com bubble, thousands of projects on the market will fail, leaving only a few dozen.

A layer-2, while a useful product for its users, doesn’t do much to state Shiba Inu’s case for the future. There are lots of layer-2 networks out there, especially on Ethereum. And many continue to improve faster and faster, like Polygon (MATIC-USD), which just implemented another upgrade to keep gas fee prices negligible.

Layer-2 networks also typically seek to serve as many different users as they can. Shibarium, on the other hand, is suited mostly toward SHIB investors only, as well as the network’s sibling tokens like Leash (LEASH-USD). As it has been advertised thus far, it’s a tool for SHIB investors to learn more about blockchain without expanding beyond the Shiba Inu network. This limits the appeal even further. After well over a year of development, SHIB still fails to convince investors that it can weather the impending crypto mass extinction event.

On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Brenden Rearick is a Financial News Writer for InvestorPlace’s Today’s Market team. He mainly covers digital assets and tech stocks, with a focus on crypto regulation and DeFi.

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