Crypto Intermediate

What is ShibaSwap?

ShibaSwap

Dog-themed cryptos dominate the meme coins category of digital currencies. Some of these have even outperformed the top cryptos that have been around for much longer. Meme coins such as Dogecoin and Shiba Inu captured the imagination of crypto investors in 2021, spurring the birth of newer DEX ecosystems such as ShibaSwap.

Shiba Inu (SHIB), the self-proclaimed “dogekiller,” rallied a whopping 49,000,000% in 2021, minting many a crypto millionaire. The SHIB community is one of the most dedicated and robust communities in crypto. Interestingly, the Shiba Inu community is building one of the most interesting Shiba Inu protocols, its decentralized exchange called ShibaSwap. For context, a decentralized exchange allows users to swap tokens eliminating the need for an intermediary or counterparty.

ShibaSwap explained

ShibaSwap is the decentralized exchange (DEX) of the Shiba Inu ecosystem. Launched at the peak of Shiba Inu’s bull run in July 2021, ShibaSwap, a DEX, allows users to trade tokens on a peer-to-peer network. DEX is a peer-to-peer marketplace where transactions occur directly between crypto traders without an intermediary or custodian. Smart contracts facilitate transactions. Other popular DEXs in the crypto space include Uniswap and Sushiswap, which run on the Ethereum blockchain.

Being a DEX, ShibaSwap offers a more private and secure environment to crypto traders than centralized exchanges (CEXs). With ShibaSwap DEX, crypto traders can swap tokens directly without a third-party protocol to approve the transaction. Like many other decentralized exchanges, ShibaSwap is built on the Ethereum blockchain, and users can trade ERC-20 tokens. For context, ERC-20 tokens are fungible tokens that are interchangeable with other tokens on the Ethereum blockchain. In addition to the ERC-20 tokens, ShibaSwap users can also trade in stablecoins.

The ecosystem’s native token, SHIB, and secondary tokens, Bone and Leash, fuel the ShibaSwap DEX. Users can buy SHIB, BONE, or LEASH and ‘swap’ them for ERC-20 tokens.

All about ShibaSwap tokens: SHIB, BONE, and LEASH

Staying true to the dog theme, ShibaSwap tokens SHIB, BONE, and LEASH are variations based on the Japanese dog breed Shiba Inu, the mascot of meme coins. What makes ShibaSwap stand out from other DEXs like UniSwap and PancakeSwap are the three native tokens. These three tokens work in synergy to make ShibaSwap one of the best DEXs, elevating Shiba Inu’s stature in the process. Let’s examine each of these tokens in detail.

SHIB

SHIB is the eponymous token of the Shiba Inu ecosystem and the first among the three tokens to be listed and incentivized on ShibaSwap. It is also one of crypto’s most popular meme coins by popular demand and market cap, currently ranked the 14th largest, according to CoinMarketCap. Thanks to its launch on the Ethereum blockchain, SHIB is an Ethereum-native ERC-20 token.

Let’s look at how it all started. SHIB has a starting supply of 1 quadrillion (equal to 1,000 trillion). Ryoshi, the pseudonymous co-founder of the decentralized crypto, locked 50% of this supply in Uniswap and sent the remaining 50% to Ethereum co-founder Vitalik Buterin.

To ensure the long-term success and stability of the Shiba Inu ecosystem, Buterin burned 80% of the SHIB tokens sent to him, worth $6.7 billion at the time, and donated the remaining 20% to charity. Ryoshi lauded Buterin’s gesture, “Thank you to the woofmeister for enabling true decentralization. Now we truly begin,” according to the official Shiba Inu website.

BONE

BONE, another ERC-20, is the governance token of the ShibaSwap ecosystem, with a total supply of 230 million coins. Governance tokens are a type of crypto that allows token holders to vote and make significant decisions for the project, like upcoming proposals and changes to the ShibaSwap protocol. BONE being a governance token, its holders can propose and vote on changes to the ShibaSwap protocol through its “Doggy DAO,” a decentralized organization controlled by the Shiba Inu community. The more BONE tokens a user holds, the greater their voting power. Besides, stakers and liquidity providers on ShibaSwap get their rewards in BONE.

LEASH

LEASH, also called Doge Killer, is the other token underpinning the ShibaSwap DEX. It was initially launched as a rebase token where LEASH leveraged the price of Dogecoin (DOGE), hence the name Doge Killer. In other words, a computer algorithm regulates the supply of LEASH to keep its price pegged to DOGE. The price of LEASH was set at a rate of 1 DOGE to 1,000 LEASH. However, LEASH tokens have since been “unleashed.” It no longer tracks the price of DOGE. Rather, it acts as a store of value token. With a supply of just 107,647 tokens, LEASH is the leading coin for the project’s investors.

ShibaSwap utilities for users

Source: ShibaSwap website

ShibaSwap and its native tokens help users perform various functions—Dig, Woof, Bury, Swap, Doggy DAO, and trade NFTs. Let’s dig in to understand each.

  • Dig: According to the ShibaSwap website, this feature “Provides Liquidity to earn BONE.” Users can deposit crypto assets in pairs to existing liquidity pools on the platform or create their own. Liquidity providers receive ShibaSwap liquidity pool tokens (SSLP) as rewards.
  • Woof: Woofing is another way to earn rewards in ShibaSwap. The feature is basically for redeeming BONE rewards by cashing out SSLP tokens on the ShibSwap platform.
  • Bury: BURY is ShibaSwap’s staking feature. Users can stake their SHIB, LEASH, and BONE to generate rewards paid in BONE tokens. Once staked, users receive a token that represents their staked amount in xSHIB, xLEASH or xBONE. While the staking yields high rewards, only 33% of BONE rewards are available immediately, and the remaining 66% are locked up for six months.
  • Swap: This facility allows users to swap between multiple assets. Users can also exchange a single asset for multiple other assets, depending on its value.
  • Doggy DAO: Doggy DAO (decentralized autonomous organization) is the governance system that drives the ecosystem. It gives users a stake in the Woof liquidity pool and the right to vote on certain issues.
  • NFTs: ShibaSwap has its own NFTs, known as Shiboshis. They are part of the bigger project called the Shiboshi Game, later rebranded as Shiba Eternity, which is quite popular among the Shib army. Users can buy, sell, and trade in 10,000 unique Shiboshis that are only available on ShibaSwap. Besides, Shiboshi holders can customize their Shiboshis.

Conclusion

ShibaSwap aims to make SHIB more than a meme coin. ShibaSwap, just about a year old, is taking baby steps compared to other DEXs. However, the Shib Army is one of the most active communities in the crypto space. The community’s continued support for the Shiba Inu ecosystem and ShibaSwap DEX ensures the overall hygiene of the project. ShibaSwap looks set to lead the next generation of DeFi platforms, thanks to the growing adoption of meme coins.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered investment/financial advice from CoinSwitch. Any action taken upon the information shall be at the user’s risk

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