Explained: Can Shiba Inu overtake Dogecoin this year

On the other hand, Shiba Inu’s utility comes from a variety of use cases. The project taps into the DeFi sector through its decentralised exchange (DEX) called ShibaSwap, which allows users to swap tokens, access liquidity pools, buy and sell NFTs, stake their tokens, and participate in governance. The recent release of Shibarium, Shiba Inu’s layer-2 scaling solution, will also facilitate the development of decentralized applications. The same is expected to bring in more investments over the long run.

Shiba Inu’s metaverse, which is likely to debut by the end of 2023, and a number of games including Shiba Eternity, Shiba Run, and Shiba March, all contribute to the project’s growth potential as well. In contrast to Dogecoin, each of these initiatives offers a unique use case.

Besides these factors, Shiba Inu’s utility is also derived from it being accepted as payment, similar to Dogecoin. Video game retailer GameStop, supermarket Whole Foods and animal products maker Petco are among the most prominent firms that accept SHIB as a viable form of payment.

Use cases only present one side of the story while on-chain data provides a more comprehensive picture. For instance, the number of daily active addresses (DAA) is commonly used to measure the state of a network. DAA is a measure of the total number of unique addresses that sent or received tokens on a particular day. A higher DAA count is indicative of a healthy network, which in turn points to a greater growth potential.

As per data tracker IntoTheBlock, the DAA on the Shiba Inu network has averaged between 5,000 to 6,000 transactions each day since the start of the year. In contrast, Dogecoin outshines its smaller rival. Dogecoin’s DAA has averaged well above 50,000 since January 1, suggesting that its network has attracted significantly more investors than Shiba Inu.

The biggest reason why Dogecoin has an upper hand over Shiba Inu is due to its early-mover advantage and more well-known celebrity endorsements, such as Elon Musk. The project has been around since 2013 and nearly 4 million holders currently own Dogecoin in their holdings, as of February 2023.

Meanwhile, Shiba Inu holders were last reported at 1.28 million, less than half that of Dogecoin. The smaller meme project was launched in 2020 and has had significantly less time than Dogecoin to create a name for itself among the community.

The cryptocurrency industry is amidst a recovery in 2023, including the broader meme coin sector. On the back of a wider resurgence, Shiba Inu’s price has risen by more than 42 percent since the start of the year, as per Messari. In comparison, Dogecoin has risen by a smaller figure of over 30 percent.

However, despite higher percentage gains and greater use cases, Shiba Inu still falls short of Dogecoin’s dominance in the meme sector. Therefore, it may take longer than a year for Shiba Inu to close that over $6 billion gap in market cap and overtake Dogecoin.