How to Stake Shiba Inu ($SHIB)

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Altcoins
How to Stake Shiba Inu ($SHIB)

The introduction of the Bitcoin paper in 2008 by Satoshi Nakamoto was aimed at revolutionising and decentralising the financial world using blockchain technology and giving power back to the people. Ethereum and other altcoins followed suit and are at the forefront of this change.

One specific kind of altcoin: meme coins, brought in more people into the crypto sphere than any other altcoin, with Dogecoin as the pioneer meme coin followed by Shiba Inu, which soared to become the top meme coin based on market capitalization.

Shiba Inu boasts a large community of members and is highly profitable for investors. In addition to investing in Shiba Inu tokens, investors may make money by staking the coins. This article details where, why, and how to stake Shiba Inu.

What is Shiba Inu?

Launched by Ryoshi in August 2020, Shiba Inu is an Ethereum-based, decentralized meme token featuring the Shiba Inu: a Japanese breed of hunting dog, as its mascot. The token rapidly evolved into a vibrant Ecosystem comprising a decentralized exchange, ShibaSwap.

Shibaswap was launched in July 2021, a large DeFi staking and rewards system and an NFT marketplace. Despite its 2-year existence, Shiba Inu has millions of strong and loyal community members globally, making it one of the world’s top 20 cryptocurrencies.

Shiba Inu was created with an initial total supply of 1 quadrillion tokens. Ryoshi locked half of the total supply in Uniswap for liquidity and sent the other half to Ethereum co-founder Vitalik Buterin. Buterin then donated 10% of the tokens received to charity and burnt the remaining 90%, leaving a current Shiba Inu supply of about 549 trillion tokens in circulation.

The SHIB are ERC-20 tokens and work by leveraging smart contracts. The Shiba Inu ecosystem comprises two more ERC-20 tokens: BONE and LEASH. BONE is the governance token used by the Shib army to vote and participate in governance on their DAO. LEASH was a rebase token pegged to Dogecoin’s price but was allowed to unleash its full potential.

The Shiba Inu Ecosystem

  • SHIB: The project’s foundational currency is tradeable and is used as a medium of exchange.
  • LEASH: The second token in the ecosystem is to provide Shiba Inu staking rewards to those validating transactions. It is the most limited of the Shiba Inu tokens.
  • BONE: Bone is the third token with a total supply of 250,000,000 tokens. It is a governance token that allows the SHIBArmy to vote on various proposals. 
  • ShibaSwap: A DeFi platform for trading cryptocurrencies.
  • Shiboshis: 10,000 Shiba Inu non-fungible tokens (NFTs) on the Ethereum blockchain are unique and collectible.

What is Shiba Inu Staking?

Before you learn how to stake SHIB, you have to understand what is staking. Hence, Shiba Inu Staking is the process of dedicating Shiba Inu tokens to a pool to earn rewards. Various exchanges offer different interests depending on the amount staked and the staking period.  Payouts range from daily to weekly, monthly, and annually.

Staking on decentralized exchanges is accessible to all users with crypto wallets. However, centralized exchanges are limited depending on certain jurisdictions.

Staking provides liquidity for exchanges and supports node validators, which is a crucial part of the proof of stake (POS)protocols. Ethereum is soon shifting to a POS consensus protocol.

Shiba swap is the official Shiba Decentralized exchange (DEX) and boasts a community of over 3M Twitter followers.

How Does Shiba Inu Staking Work?

Shiba Inu is an ERC20 token and is not mined. Users earn rewards through Shiba Inu staking in a process called Burying. Rewards are in xBONE, xSHIB, and xLEASH tokens proportional to the staked Shiba coins. Staking Shiba Inu provides liquidity to the pool and validators.

Shiba tokens have a large and active community compared to all other tokens, making them available on almost all major crypto exchanges globally, most of which support Shiba staking. Binance and Crypto.com are among the largest centralized exchanges allowing buying and staking Shiba, with their interest payouts varying daily, weekly and monthly. 

Staking Shiba is also possible on decentralized exchanges using crypto wallets like Metamask. Shiba Inu has its own Dex, ShibaSwap, and staking SHIB on its platform is encouraged. Users either deposit Shiba tokens in wallets for Dex or buy Shiba Inu for centralized exchanges to stake Shiba. 

Staking Shiba Inu on ShibaSwap DEX

Shiba swap allows the staking of all Shiba Inu tokens, including Bone and Leash. Staking rewards are proportionate to the corresponding share of the entire pool and are distributed weekly. Only 33% of staked rewards can be redeemed, with the remaining 67% having a 67-day lock period. 

To stake SHIB, users connect their crypto wallets containing SHIB tokens to Shiba Swap, which supports wallets such as Metamask and Coinbase. Users then buy SHIB from a centralized exchange and transfer it to their wallets or buy the tokens on Shiba Swap by swapping them for ETH or other supported cryptos.

It is critical to have enough ETH or the swapping crypto in the wallet to purchase the swap and cover the transaction gas fees. Once a sufficient amount of SHIB is acquired, the tokens are Staked under the Bury option on the platform.

Shiba Inu Staking Through a Pool

Pooling reduces transaction fees and lending liquidity to borrowers, thereby leveraging higher returns. Crypto exchanges that allow the pooling of Shiba Inu include crypto.com and Binance. 

Binance offers both locked and flexible staking and currently offers the highest interest rates on Shiba Inu staking. It, however, does not support the other Shiba Inu tokens, Leash and Bone.

Crypto.com allows flexible staking on a one, and three-month term basis with Interest paid out weekly. The annual percentage rate of interest depends on the staking amount, the locking period, and the number of Cronos held by the user. Cronos refers to the crypto.com native token. 

Staking Shiba Inu On Binance

Binance is the world’s biggest and most popular centralized exchange and offers both flexible and locked staking. With flexible staking, users withdraw staked SHIB tokens at any time, whereas in locked staking, withdrawal of locked SHIB tokens incurs a loss of interest.

To stake SHIB, users buy SHIB tokens on Binance by creating a retail investor account using a phone number and email address, completing a KYC, and setting up two-factor authentication to secure their account. Shiba Inu is then purchased using crypto or fiat currencies like USD. 

The staking options range from 10, 30, 60, 90, and 120 days and flexible savings. The Annual Percentage Rate (APR) varies from 0.50% on flexible savings to 12.09% on staking Shiba Inu for 120 days. These flexible and locked staking plans are highly on demand and are available on a first-come-first-serve basis.

Shiba Inu: How Is It Secured?

Basically, the Shiba Inu network is built on the Ethereum network. Ethereum is currently switching from PoW to PoS consensus techniques for mining. By staking SHIB, you support the security of this network. PoW takes a lot of time and uses a lot of energy. Therefore, Shiba Inu will gain from the ETH 2.0 upgrade once it is finished.

PoW calls for extremely powerful computers that compete to process transactions and provide prizes. However, PoS achieves consensus using an algorithm that chooses a victorious node to win a block of transactions; these nodes are called stake pools.

Benefits Of Staking Shiba Inu

  • Staking is a means to earn a decent passive income with regular payouts without indulging in risky trading. 
  • Provision of liquidity to Shiba Swap. 
  • The total value locked increases as more SHIB tokens are staked for a long, pushing the price of SHIB tokens upwards.
  • It is possible to stake Shiba Inu on Shiba swap without KYC compliance anonymously.
  • Staking is environmentally safe compared to mining
  • Staking on Shiba  Swap earns a user Shiba’s Ryoshi deflationary token.
  • It is possible to compound interest for higher returns.
  • The community is strengthened, and a route for distributing community airdrops is created.

Downsides Of Staking Shiba Inu

  • Earning substantial rewards requires more extended lock periods and large amounts.
  • Locked staking on centralized exchanges is limited to a particular quota, and you can miss out on the available slots. 
  • Users are faced with the High gas fees of the Ethereum protocol. 
  • The price of Shiba Inu is highly volatile, and drastic price drops may cause losses at the end of the staking period. 
  • Redemption of locked Shiba tokens on centralized exchanges before maturity causes a loss of interest.
  • Only 33% of Shiba on Shiba swap is redeemable, and the rest is locked up for 67 days before possible withdrawal.
  • Locked Staking on exchanges is fixed to a specific quota, meaning you could miss out on a high-yield staking opportunity.
  • The safety of your Shiba tokens is pegged on the exchange’s security.

Conclusion

Shiba is one of the top-ranking meme coins with a market cap of $13B and has proven to be one of the best-performing cryptos. Staking on the Shiba swap is straightforward but is substantially limited by high Ethereum Gas fees. Staking on Binance takes a process, but their low transaction fees and high staking rewards are worthwhile. Crypto.com is an equally good option but requires users to lock CRO for a minimum of 6 months for a good return.

Staking is one of the best ways to earn interest on your investment and establish a sustainable passive income stream with regular payouts. Shiba Inu Staking is profitable, given that its value does not crush.

Julius Mutunkei

Julius is a blockchain reporter skilled at synthesizing all crypto-related information to make articulate texts easy for anyone to grasp. With a beginner's level certificate in Financial Analysis, Julius can read, interpret and report crypto findings to help investors exercise the best judgment in their decision-making process. When he is not caught up in the crypto frenzy, Julius likes playing a game of FIFA with his online buddies.