SHIB Market Cap Drops to $7.17B Amid Governance Disputes

A Shiba Inu developer has publicly criticized internal divisions within the SHIB community as a major barrier to progress, as the token’s market position continues to decline. Kaal Dhairya, a key figure in the project’s development, highlighted how personal bias and lack of transparency in decision-making are hampering the ecosystem’s growth and weakening community trust [1]. Speaking on X during August’s market downturn, Dhairya argued that these internal conflicts pose a greater threat than external market pressures.

SHIB’s market cap currently stands at $7.17 billion, placing it 22nd on cryptocurrency rankings, down from a top-20 position earlier in the year [1]. The token saw a 9% gain in July but failed to sustain momentum, dropping from a high of $0.00001437 on July 28 to $0.0000116 by August 2. The decline reflects broader struggles within the community, including governance disputes and a lack of consensus on key development strategies.

Dhairya pointed to the K9 project as a past example of how collaborative decision-making had previously driven growth within the Shiba Inu ecosystem. Backed by trusted developers like himself and Shytoshi Kusama, the initiative received widespread community support without allegations of fraud [1]. In contrast, he described the current climate as one marked by personal rivalries, distrust, and opaque project evaluations.

The developer emphasized the need for stronger decentralized governance through the activation of Shiba Inu’s DAO (Decentralized Autonomous Organization). This would allow every member—referred to as “Shibizen”—a voice in critical decisions, moving away from centralized leadership [1]. He also advocated for greater transparency in project promotion and advisory roles, suggesting that the community should hold leaders accountable under ethical guidelines like the Great Canine Code.

Meanwhile, external pressures are also threatening SHIB’s standing. Rival projects have pushed Shiba Inu out of top-10 rankings, while major web3 companies and crypto infrastructure providers appear to overlook the project despite its sizeable market presence [1]. Dhairya also criticized centralized exchanges for profiting from SHIB trading without offering proportionate recognition to the community.

Further tensions emerged following the POE IDO on Positions Exchange, which WoofSwap and other developers accused the core team of favoring [2]. These accusations have sparked a broader debate over governance structure and the balance between centralized and decentralized decision-making. WoofSwap has proposed reforms such as a revised BONE token allocation model and gas optimization strategies to address concerns over fairness and transparency [2].

The core team has responded by acknowledging the issues and proposing the activation of the Shiba Inu DAO. However, critics argue that the plans lack specific timelines and implementation details [2]. This absence of a clear roadmap has led to skepticism among long-time advocates of decentralized governance.

The ongoing disputes have had tangible effects on network performance. Transaction volumes on Shibarium, Shiba Inu’s Layer 2 blockchain, dropped by 23% following the controversy, while new wallet creation declined by 22% [2]. Although technical metrics like transaction speed remain competitive, the erosion of trust appears to be having a more significant impact on user confidence.

Community sentiment is polarized, with approximately 40% of developers supporting WoofSwap’s reform agenda [2]. Others remain loyal to the existing leadership, fearing instability from rapid changes. Token holders have also shown increased trading activity during peak controversy periods, reflecting heightened interest in the outcome of the governance debate.

External observers are closely monitoring the situation, with some projects exploring cross-chain alternatives amid prolonged governance instability. The broader crypto community sees the Shiba Inu case as a key example of the challenges in balancing efficiency with decentralization [2].

As the debate continues, the Shiba Inu ecosystem stands at a crossroads. The resolution of these internal disputes will likely determine not only the future of Shibarium but also the broader trajectory of decentralized governance in the crypto space. For now, the controversy highlights the complexities of maintaining trust and fairness in a rapidly evolving digital economy.

Source:

[1] CoinMarketCap - [https://coinmarketcap.com/community/articles/68924c771cbcaf512d4b1a45/](https://coinmarketcap.com/community/articles/68924c771cbcaf512d4b1a45/)

[2] Cryptsy - [https://cryptsy.com/shibarium-faces-reform-push/](https://cryptsy.com/shibarium-faces-reform-push/)