You are correct to say that Shiba Inu coin is a shitcoin. But lets be honest here, someone told me that this coin has risen 1,200,000% since its launch in August last year. And we know its only main purpose is a store of value “asset” if you even call it that. No, there is no smart contract or any other real case utility for this token. Just like DOGCOIN, this is just for speculation and from what is happening in the markets, it has done its job well. On CoinMarketCap, it is ranked #36 which is very impressive for such a new coin. The returns are pretty impressive.
They claim that the Shiba Inu coin is a 100% community run coin but I have no idea what that means. And I most certainly don’t understand what they mean by the Shiba Inu coin being an “improved” version of DOGECOIN. Pretty sure any coin out there will be an improved version of DOGECOIN given that it is just a direct clone of Litecoin and Luckycoin which themselves are also clones of Bitcoin. Basically the developers just copied the source code and made a few changes to it and called it DOGECOIN.
Anyway enough of my silly rant. The main reason for this post is to share my experience as an liquidity provider for the SHIBA/USDT pair in Binance pool. But as you can tell from the markets these days, the volatility is through the roof. Just a few days ago, SHIBA suddenly went up to 0.00000988 before slowly going down again to 0.00000739 at the time of writing. And volatility is bad for liquidity providers as when the price fluctuates, there will be higher impermanent loss. If you would like to read about impermanent loss, please take a look at my post on the risks of being a liquidity provider.
I had initially thought that being a liquidity provider for such a speculative coin will be profitable as this would mean that trading volume will be extremely high. But after about 2 weeks of depositing my SHIBA & USDT into the pool, I don’t think I even break even yet. And the impermanent loss is rather high as the price goes up and down. But I am guessing being a LP is all about long term. If you are willing to stay for the long term (and hope that the SHIBA INU coin doesn’t actually tank to 0), you might get some profit out of it. The SHIBA/USDT liquidity pool has (or had) one of the highest yields in the Binance pool. Seems to be dropping quite significantly these few days though. Does that mean there is reduced interest in this coin or that this is just the general sentiment in the crypto market these days? Trading is very subdued probably due to too much FUD and market manipulation. Volumes are down quite significantly as well.
I will update this post in a few more weeks time. I don’t really have that much data I can actually use. However at the moment, I would not recommend anyone to park their tokens into the SHIBA/USDT pool. And oh I am not a financial advisor and you should do your own research when doing investing.
