A Guide to Understanding ShibaSwap for Shiba Inu – Hongkiat


ShibaSwap is a decentralized exchange that allows users to trade with each other in a peer-to-peer manner. It aims to be the next evolution of the decentralized ecosystem.

It aims to solve the problem of centralized cryptocurrency exchanges by eliminating the need for third-party intervention and middlemen. ShibaSwap offers traders more privacy, security, and control over their funds than most popular centralized exchanges do today.

And yes, if you’ve been following the news, you would already know or guess that ShibaSwap is a response to Shiba Inu (SHIB) holders. Visit the official website linked here to read the WoofPaper (their fancy way of saying Whitepaper).

A Little Bit of its History…
What is ShibaSwap - Kabosu, original Shiba Inu of Dogecoin

Have you heard about Dogecoin? It is a popular virtual currency (similar to Bitcoin) that was created and started out as a joke. It is inspired by an adorable dog breed which is called Shiba Inu, making it the face of their virtual currency. I bet you’ve seen a bunch of its memes as it became popular on the internet, gaining hundreds of thousands of fans and supporters. It was even backed by the billionaire Ellon Musk himself, and teasing people if Tesla should accept DOGE. It just made it even more popular.

What is ShibaSwap - Elon Musk and Dogecoin

Over time, it gained a lot of momentum and value on the market.

Little did they know that it would inspire a new cryptocurrency which is now known as Shiba Inu, or SHIB. It was created by a pseudonymous founder called Ryoshi in August 2020. It started out as a joke as well, but what’s interesting is that they promote it as the “Doge Killer” because it can outperform Dogecoin’s price growth even without surpassing a penny. The price of SHIB tokens is so low that investors can own billions or even trillions of tokens.

What is ShibaSwap - SHIB to the moon

As of writing this, the value of SHIB increased by 12 times in just a week and it is still stable up there. And there is one SHIB whale who initially purchased $8000 worth of SHIB, which is now valued at around $5 billion.

If you’re interested in news or memes, join the /r/shib subreddit.

Why is SHIB important?
What is ShibaSwap - Shib subreddit

SHIB is the foundational currency of ShibaSwap, as well as the Shiba Army (as they call themselves). It is said that it has one quadrillion tokens in circulation today. To help you visualize it better, that’s 1,000,000,000,000,000. That’s a lot of zeros, huh. Million, followed by Billion, Trillion, and then Quadrillion. The latest price for each token hovers at $0.000066 as of writing this. So now you see how it is possible for people to own millions, billions and even trillions of this token.

Now, this brings us back to ShibaSwap…

ShibaSwap is Decentralized

ShibaSwap is part of the decentralized financial ecosystem built on the Ethereum network. Why Ethereum? Ryoshi, the founder, saw that it is already secure and well-established and it allows them to stay decentralized. Their priority is to ensure that the project is free to change and evolve without the outside regulations holding it back. Ethereum was the way to go to achieve that goal.

But What does a Decentralized System mean?

By keeping the system completely decentralized, people have more freedom over their assets. A decentralized exchange, or DEX, is an exchange that does not rely on a third party to hold funds or information, instead, it allows users to trade directly with each other. ShibaSwap is one such example of this type of platform.

What is ShibaSwap - Shib swap tokens

A key benefit of DEXs over their centralized counterparts like Binance and Coinbase is the lack of reliance on trusted third parties (TTP). No more “Gatekeepers” that would pry into or say no to your transactions, no governments nor managers that prohibit you from doing something and no approval or any authorization needed, no limits whatsoever. You decide what you do with the assets that you OWN.

Okay, but in simple terms, what is the purpose of ShibaSwap?

ShibaSwap is a trading platform where users can swap ECR20 tokens like ETH (and Wrapped ETH or wETH), DAI, USDC, USDT, AXS, MATIC, and of course SHIB, along with dozens more.

Within ShibaSwap you can swap one coin to another, but you can also stake your SHIB to get rewards.

But before that, if you’re not yet familiar with it, Staking basically means you are “locking” your token into the pool to help provide security in it, and as a return you can gain interest based on how much token you are staking.

Anyway…

The 3 Flagship Tokens of ShibaSwap

You need to know about the 3 main flagship tokens of ShibaSwap. SHIB, LEASH, and BONE.

SHIB is the ticker for Shiba, the main token, and I’ve mentioned this repeatedly already, but it’s always good to know. LEASH and BONE on the other hand are tokens meant to incentivize SHIB holders.

I already mentioned SHIB so we’ll just talk about BONE and LEASH.

What is BONE?
What is ShibaSwap - ShibaSwap Bone

BONE token is said to be somewhat of a middle ground between SHIB and LEASH tokens, having a maximum supply of 250,000,000 BONE coins, valued at around $2.69 each as of writing. It is also a governance token that allows the holder to vote for important matters in the coming year. And the more BONE the holder has, the more weight of the vote will have on future decisions.

What is LEASH?
What is ShibaSwap - ShibaSwap Leash

LEASH tokens, on the other hand, have a different approach. With a maximum supply of only 107,646 in circulation today, each token is valued at around $3,100. Because of the scarcity of supply, it is normal for it to be that expensive. After all, air would not be free if it were scarce, right? That’s how the law of demand and supply affects its price. The lower the supply in accordance with its demand, the higher the price will be.

The three tokens mentioned are the origins of the Shiba Inu’s ecosystem. They have ambitions to grow and develop ShibaSwap and other parts of the system. The potential of this project is hard to imagine. It will surely revolutionize how the current traditional system works.

Now, for these tokens, you can do two things to earn rewards.

Two Token Functionalities

Tokens in the Shiba Inu ecosystem can be either buried or dug.

What is ShibaSwap - ShibaSwap Bury

The BURY function is basically staking the token. To further elaborate, “staking” means locking up or stashing away a portion of your tokens for a period of time as a way to contribute to a blockchain network. By doing so, holders or stakers will be able to earn rewards, in the form of additional tokens. You might also call it “interest”.

When you bury or stake your tokens you’ll receive tokens that represent your share of the pool. Burying SHIB token will give you xSHIB, burying LEASH will give you xLEASH, and then tBONE for when you bury BONE tokens.

What is ShibaSwap - ShibaSwap Dig

On the flip side, DIG or digging function is a way to farm tokens.

When you dig you’ll receive a ShibaSwap LP (SSLP) token. Digging SHIB will give you Shib-Eth SSLP, digging LEASH will give you Leash-Eth SSLP, and then Bone-Eth SSLP for when you dig BONE tokens.

These pools will then distribute rewards proportionally to holders of the aforementioned token pools.

Again, about the Rewards System:

  • SHIB tokens – Burying these tokens will allow you to earn 3% of all the BONE per block accumulated in xSHIB.
  • xSHIB will also receive 0.3% of all the Ethereum Swap transaction fees that occur on the ShibaSwap exchange. This method is called “Double return puppy pool”.
  • LEASH tokens – When burying LEASH tokens (xLEASH), The people holding the xLEASH receive 0.5% of all BONE per block. And when digging, the digger gets a share of the LEASH-ETH SSLP.
  • BONE tokens – When burying Bone Tokens (tBone), the holder will be part of a pool that provides the members 1% of all the BONE per block. And when digging, The digger receives a share of the BONE-ETH SSLP.

I know, it’s a lot of information, but if you check the DEX right now and dig a little deeper while armed with the information you just read above, you’ll be flying to the moon in no time!

Ending

Cryptocurrency is still in its early stage, but it is clear that it will soon (hopefully) replace the old system that we currently have. It is inevitable. As our technologies improve, we find ways that help us accomplish tasks much faster and conveniently. With that said, ShibaSwap’s potential for growth and development is optimistic.

Disclaimer: This is not financial advice, this is for educational purposes only. Trading cryptocurrencies is highly volatile and hard to predict. Invest at your own risk and make sure to do intensive research before hopping right in.

Happy trading!





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