What Is ShibaSwap, and How Does it Work?
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ShibaSwap is a decentralized exchange (DEX) developed by the creators of Shiba Inu. It was built on the Ethereum blockchain and launched in 2021, and just like Shiba Inu, it uses SHIB as its native token.
The Story Behind the Launch of ShibaSwap
It is well known that Dogecoin is the godfather of all meme coins. It pioneered the contentious practice of introducing cryptocurrencies as a joke on the blockchain. Following the launch of Dogecoin, hundreds of other meme coins popped up on the scene that added no real value to the system. Understandably, most of them failed and faded away with time, and a lot of people lost money, believing that one of them would become the next Dogecoin.
The concept of rug pulling also became popular during this time, and people soon grew wary of meme coins. Amidst all this, Shiba Inu appeared as a contender for Dogecoin’s throne. Shiba Inu might have begun as a cryptocurrency with modest and amusing beginnings, but it gradually developed and expanded into a highly serious project in the crypto sphere. With the expanding Shiba Inu universe came ShibaSwap, one of the crown achievements of the meme coin.
All numbers in this article were taken on March 31, 2023; hence, please check their relevance if you are reading this article at a later date.
Instead of having just one token, ShibaSwap has three tokens that are used to control and regulate how the platform functions. This feature in and of itself is completely unique to ShibaSwap and has never been seen before in the blockchain world. Let’s take a closer look at each of them!
Shiba Inu (SHIB)
SHIB is the native token of ShibaSwap, and it is at the core of the exchange’s functionality. The coin was created in 2020 by an anonymous entity known as Ryoshi. The exchange uses the coin mainly for the purpose of trading and storing assets. SHIB has a market cap of $6.2 billion, currently circulating at a supply of 589 trillion, which is, at the time of writing this post, the second-highest supply of any crypto token in the world. This puts the price of one SHIB at $0.00001058, which is understandable considering its vast supply.
BONE is ShibaSwap’s governance token. A governance token is like a vote. Having more of them allows you to have more of a say in the decision-making process of a crypto platform or project. Holders of BONE can suggest and vote on changes to the protocol of the Shiba Inu Doggy DAO. BONE currently has a market cap of $241.7 million, with a circulating supply of 230 million and a price of $1.05.
Doge Killer (LEASH)
Undoubtedly, Dogecoin has a lot to do with the rather sinister moniker, Doge Killer. The LEASH token was designed to be DOGE’s elastic token. An elastic token adjusts its supply according to the demand so that the price remains relatively stable, and it is usually pegged to a strong cryptocurrency to ensure that it does not fail in extreme situations.
However, following the TetherUSD and LUNA fiasco, the coin was de-pegged from DOGE and now exists as an independent token on the Ethereum blockchain. At this point, the coin is more of a collector’s edition coin, with a very high price of $382, a market cap of 41,000,000, and a circulating supply of only 107,647.
ShibaSwap has a lot of features that come with very funky names (after all, it is still a meme coin). Apart from its token exchange and reward systems (which we will talk about later), ShibaSwap has a lot of features that increase its usability.
The Dog Park is a portfolio of all your assets, and a history of all your staking, trading, and ROI can be found here. The amounts you’ve spent burning and minting, as also the transaction fees, are visible on this page, along with your yield rewards. Using all this data about your activity, you can find interesting patterns and optimize how you trade.
ShibaSwap has its own NFT project known as Shiboshis. It has a rough estimate of 10,000 pieces with variable rarity and value and will be launched as part of the larger Shiboshi game. The NFTs will be used as skins in the game and are also highly customizable, so the value of an NFT can depend on how much value a user adds to it. It is rumored that the NFTs will add a lot more than just visual appeal to the game, but we’ll have to wait for the game to launch to find out more.
The Doggy DAO is a decentralized autonomous organization, the decision-making authority that decides what will happen inside the entire Shiba Inu system. With the BONE token functioning as a voting system, it allows users to share their suggestions for improvements and vote on suggestions made by other users.
The Reward System
And finally, the real reason why everyone is here: the reward system of ShibaSwap. The exchange offers you several ways to use your funds to make a profit, and we’ll list them all below so you may choose which one to employ.
Dig refers to staking in the Shiba terminology. Users commit their funds in the form of SHIBA tokens in a liquidity pool, and they receive BONE tokens based on a percentage of how much SHIBA they’ve staked. Users are initially provided with ShibaSwap Liquidity Pool Tokens (SSLP), which are proof of the time and money you’ve spent staking. When you remove your funds, you can convert SSLP to BONE.
Bury is also a form of staking, but it is a long-term commitment. Instead of just SHIB tokens, you can stake SHIB, BONE, and LEASH. In return, you will receive xSHIB, xBONE, or xLEASH tokens that are proof of your stake. The money will be locked up for a period of 6 months, during which you will receive 33% of your returns on a weekly basis, and the rest will be locked alongside your funds. In return for committing your money for so long, you get high-interest rates, so the commitment is worth your while.
The Woof system is a yield farm pool that allows users to trade their BONE rewards via the SSLP tokens. 33% of the rewards are handed over immediately, while the rest are locked for a six-month period.
4. Burn Portal
The Burn Portal is perhaps the most interesting and unique among them all. As we mentioned already, the SHIB supply is extremely high. That does not bode well for any token. Thus, the developers are trying their best to control the supply and increase the value of the SHIB token.
To accomplish that, users are encouraged to burn SHIB tokens through the Burn Portal. As a reward, they are given RYOSHI tokens. The RYOSHI tokens have a circulating supply of 282 trillion and a market cap of $524,000, which puts the price of one RYOSHI token at $0.000000001854. Interestingly enough, RYOSHI’s price has increased by more than 200% recently, which suggests that the token is in high demand.
How to use ShibaSwap step-by-step
i. Connect Your Wallet
To use ShibaSwap, you’ll first need to connect your Web-3 wallet to the platform. It’s important to note that only wallets with the ability to interact with smart contracts will work. Popular wallet options that work with ShibaSwap include MetaMask, TrustWallet, and BraveWallet.
ii. Deposit Assets
After connecting your wallet, you can deposit assets into the liquidity pool of the trading pair you’re interested in. In return for your deposit, you’ll receive liquidity tokens that represent your stake in the network. These tokens are necessary to participate in trades and earn rewards. You can deposit all four types that we described above.
With your liquidity tokens in hand, you can start trading on the ShibaSwap network. The exchange rate is variable and is determined by using the automated market maker system. Essentially, as demand for a particular asset increases, the price will go up, and vice versa. This system helps maintain a stable exchange rate and liquidity in the market.
iv. Withdraw Assets
Once you’re done trading and have liquidity tokens left over, you can convert them back into the desired asset and withdraw them to your wallet. This allows you to take your profits or move your assets to another platform.
ShibaSwap is one of the most up-and-coming decentralized exchanges in the market, with a thriving community supporting it. It’s true that there were a lot of fears and uncertainty attached to the exchange at first since it is associated with a meme coin, and meme coins are notorious for rug pulls.
However, ShibaSwap has proved its authenticity time and again, and the progress that the exchange has seen in recent years is a testament to its growing popularity and utility in the crypto space.
The editorial content of OriginStamp AG does not constitute a recommendation for investment or purchase advice. In principle, an investment can also lead to a total loss. Therefore, please seek advice before making an investment decision.