What is Shiba Inu?
Shiba Inu (or SHIB) is a meme coin, that is, a cryptocurrency inspired by a meme. Memes are jokes, phrases, images, or ideas that are shared or spread via the Internet, particularly social media platforms, and often for humorous purposes.
Shiba Inu is inspired by another meme coin, Dogecoin, a cryptocurrency created in 2013 based on a popular internet meme of a picture of a Shiba Inu dog. Like Dogecoin, Shiba Inu’s name and the imagery associated with it are based on the Shiba Inu meme.
SHIB was created in 2020 by a pseudonymous developer called Ryoshi. While Dogecoin has its own blockchain and miners, SHIB is an ERC-20 token based on the Ethereum blockchain. As an ERC-20 token, SHIB can be transferred between Ethereum addresses and so can be used as a way of transferring value in peer-to-peer transactions.
SHIB started with a token supply of one quadrillion. The founder, Ryoshi, transferred 50% of the supply of SHIB to a liquidity pool on Uniswap, a decentralized trading protocol, which allowed anyone to buy or sell SHIB in exchange for Ethereum. Ryoshi also transferred the other 50% of the total supply of SHIB to Vitalik Buterin, the co-founder of Ethereum. As a result, Buterin, not Ryoshi, controlled substantially more than half of the SHIB in existence.
In May 2021, Buterin used his control of SHIB and the Uniswap liquidity to make sizeable donations to charity and burned (that is, destroyed) most of the remainder. He stated that he would donate what remained to charity. In total, over 410 trillion SHIB - nearly half of the SHIB that ever existed - have been “burned” by sending them to an Ethereum address from which they can never be recovered.
A large online community, who call themselves the ShibArmy, has emerged to support SHIB. They participate in discussions in a variety of online forums, including on Twitter, Reddit, Telegram and Discord.
Although SHIB started as a meme coin, the Shiba Inu development team has been building an ecosystem around SHIB. SHIB can be traded on ShibaSwap, a “decentralized exchange” that allows various crypto assets, including SHIB, to be swapped for other assets. The team has also created new tokens related to SHIB, which are called LEASH and BONE. BONE is a governance token that lets the self-proclaimed ShibArmy vote on upcoming proposals on Doggy DAO, a decentralized autonomous organization that governs the project.
Before trading any crypto assets it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
No securities regulatory authority or regulator in Canada has evaluated or endorsed the Crypto Contracts or any of the crypto assets made available through the platform.
Wealthsimple has performed an assessment of whether SHIB can be supported by Wealthsimple’s platform, including whether SHIB is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated SHIB based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of SHIB, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that first created SHIBA INU;
- The supply, demand, maturity, utility and liquidity of SHIB;
- Material technical risks associated with SHIB, including any code defects, security breaches and other threats concerning SHIB and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them;
- Legal and regulatory risks associated with SHIB, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of SHIB; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether SHIB, or generally about whether the type of crypto asset, is a security and/or a derivative.
Wealthsimple monitors ongoing developments related to crypto assets available on its platform for significant changes that may affect Wealthsimple’s original assessment of those assets, including Wealthsimple’s assessment of the application of securities and derivatives laws. Any significant changes relating to SHIB may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support SHIB.
Like all other crypto assets, there are some general risks to investing in SHIB. These include short history risk, volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk, electronic trading risk and cyber security risk. Please review the Wealthsimple Crypto Product Risk Disclosure for additional discussion of general risks associated with the crypto assets made available through the platform.
Additional Risks / Information
In addition to these general risks, SHIB presents an elevated short history risk and other unique risks, notably significant volatility given its vulnerability to public sentiment, celebrity whims, and negative press.
We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading SHIB. Investors should perform their own assessment to determine the appropriate level of risk for their personal circumstances.
Wealthsimple is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Wealthsimple Investments Inc. dated December 18, 2023 (the Decision).
The statutory rights of action for damages and rescission in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under securities legislation of other jurisdictions of Canada, do not apply in respect of this Crypto Asset Statement to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.
Last updated: January 1, 2024