Why Shiba Inu's Challenges Run Deeper Than Hype

The Shiba Inu ecosystem promised much—combining meme coin popularity with decentralized finance, gaming, NFTs, and layer 2 blockchain solutions. Yet despite launching Shibarium on Ethereum and ShibaSwap as a decentralized exchange, the project has tumbled over 65% year-over-year. Beyond the price collapse, three critical flaws expose why this black shiba inu-themed cryptocurrency faces structural problems.

Leadership Vacuum Creates Uncertainty

Shiba Inu’s anonymity was always a double-edged sword. The project was created by pseudonymous Ryoshi, with Shytoshi Kusama taking over as lead developer. However, earlier this year, Kusama announced they would also step back, claiming the organization no longer needed a visionary leader.

The succession plan relies on a Decentralized Autonomous Organization (DAO) vote to elect a new leader—which still hasn’t materialized. While the community of developers is reportedly dedicated, organizations fundamentally need clear direction and accountability. Even a pseudonymous figure is preferable to a leadership void.

Token Economics Built on Shaky Ground

Shiba Inu’s value proposition hinges heavily on token burning—the practice of sending tokens to dead addresses to reduce circulation. The theory is straightforward: fewer tokens should mean higher value for those remaining.

The problem? With nearly 590 trillion SHIB tokens in circulation, even aggressive burning barely moves the needle. More critically, token reduction only works when paired with genuine adoption and real use cases. That adoption hasn’t materialized. Without meaningful demand and utility expansion, the burn strategy alone cannot sustain value growth.

Security Breach Exposes Operational Gaps

On September 12, hackers infiltrated Shibarium and stole over $4 million in cryptocurrency. The attacker gained control of validator nodes and exploited that position to compromise network security. Shiba Inu responded by taking Shibarium offline for 10 days, implementing fixes, and committing to compensating affected users.

While transparency and restitution are commendable, the breach itself reveals deeper concerns. Consider the scale: Shiba Inu’s market capitalization hovers around $5 billion, yet the organization operates with only 50 to 200 employees according to available information. This raises a critical question—can such a lean operation adequately secure and maintain complex blockchain infrastructure?

The security incident exposes misalignment between the project’s ambitions and its operational capacity. Managing Shibarium, ShibaSwap, tokenomics, community governance, and security requires substantial resources and expertise.

The Bottom Line

Shiba Inu arrived as “more than just a meme,” but reality suggests otherwise. Leadership uncertainty, over-reliance on burning mechanics without corresponding adoption, and demonstrated security vulnerabilities paint a picture of an organization stretched too thin. For investors evaluating cryptocurrency allocation, these structural challenges suggest the project has substantial obstacles to overcome before warranting serious consideration.