Shibaswap explained: What is Shibaswap and how does it work?
ShibaSwap is a decentralized finance (DeFi) platform featuring a decentralized exchange (DEX) and passive income-generating services like staking, liquidity pools and yield farming in its ecosystem.
Launched in July 2021, Shibaswap is a fork of SushiSwap, a popular DEX that is itself a fork of Uniswap UNI tickers down $7.49 ,the world’s leading DEX by volume. But unlike its rivals, ShibaSwap’s core purpose has been mostly boosting the utility of Shiba Inu SHIB tickers down $0.000023 tokens.
ShibaSwap is the native decentralized exchange (DEX) of the shiba inu coin project; a popular meme coin and leading competitor of dogecoin that has risen to fame over the last 18 months. DEXs operate differently from centralized platforms such as Binance and Kraken by allowing users to swap tokens without the need for an intermediary or counterparty.
Launched in July 2021, the ShibaSwap exchange provides many of the same functions you would find on Uniswap and other decentralized exchanges, such as token swapping and liquidity pools, with the addition of other features such as staking, governance and a “Shiboshis” non-fungible token (NFT) marketplace.
What is bone shibaSwap (BONE) and doge killer (LEASH)?
Bone shibaSwap (ticker: BONE): BONE is designed to function as the platform’s governance token, with a total supply of 250 million coins. That means holders of BONE tokens are able to propose and vote on changes to the ShibaSwap protocol via its “Doggy DAO.” It’s also minted and rewarded to users who provide liquidity on the platform.
Doge killer (ticker: LEASH): This was originally launched as a rebase token (also known as an elastic token), a type of token similar to an algorithmic stablecoin where the supply automatically increases and decreases via a computer algorithm to keep its price pegged to another asset. In this case, LEASH’s supply was adjusted to track the price of DOGE at a rate of 1/1,000.
For example, if the price of dogecoin was $0.05, the supply of doge killer would change (mint new tokens or destroy coins in circulation) to adjust the price of LEASH to $50.
LEASH tokens have since been “unleashed,” and now no longer track the price of DOGE. With a scarce supply of just 107,647 tokens, LEASH has instead become the main store of value coin for the project’s investors.
How does Shibaswap work?
To understand how ShibaSwap works, we must first look at the three main flagship tokens of the DEX.
SHIB token
As stated earlier, SHIB is the native token of the Shiba Inu ecosystem. SHIB was the first token to be listed and incentivized on ShibaSwap.
However, it is SHIB’s two sibling tokens that anchor the DEX.
BONE token
Bone ShibaSwap (BONE) is designed to serve as the ShibaSwap governance token. The token allows holders to vote on upcoming proposals and changes to the ShibaSwap protocol through its “Doggy DAO,” which is the Shiba Inu decentralized autonomous organization (DAO). The more BONE tokens you possess, the greater your voting power. The total supply of BONE is fixed at 250 million tokens.
LEASH token
The other token underpinning the DEX is Doge Killer (LEASH). The token was originally launched as a rebase token where LEASH leveraged the price of Dogecoin (DOGE) to keep accruing value. In other words, LEASH prices were controlled by an algorithm that adjusted the supply of LEASH to track the price of DOGE at a rate of 1 to 1,000.
For instance, if the value of DOGE was $0.06, the supply of Doge Killer would change to fix the price of LEASH to $60.
LEASH no longer tracks the price of DOGE but rather acts as the main store of value for ShibaSwap investors. According to the project, the token has a limited supply of 107,647 tokens.
Having said that, ShibaSwap offers several functions that incorporate the three native tokens.
The first is the “DIG” function, the liquidity pool function on ShibaSwap. Using this function, you can deposit asset pairs to existing liquidity pools on the DEX. This ensures the platform has enough assets to execute transactions.
In return, you will earn rewards in the form of ShibaSwap liquidity pool (SSLP) tokens. These tokens allow you to receive free BONE tokens upon redemption.
Shibaswap explained: What is Shibaswap and how does it work? - 1
“BURY” is a function that enables you to stake your SHIB, BONE, and LEASH to generate yield in the form of BONE tokens. The bury function lets you stake your SHIB, BONE, LEASH, and receive tokens representing their staked amount in xSHIB, xBONE, and xLEASH.
When burying SHIB you are entitled to 3% of BONE minted with each new block of data. In addition, xSHIB distributes a net percentage of all ETH transaction fees on the DEX, with part of the fees being converted into SHIB tokens.
Burying LEASH yields 1% of BONE minted per block. You also get to the net a percentage of all ETH transaction fees, which are converted to LEASH.
Finally, burying BONE earns you 1% of BONE minted per block as well as a portion of the fee converted to BONE. This sort of yield farming is beneficial to those looking to increase their voting power.
Notably, 33% of staking rewards in the form of BONE can be withdrawn immediately, while to access the remaining 67%, you must wait six months.
“WOOFING” is the function for redeeming BONE returns by swapping the SSLP tokens on the DEX.
The “SWAP” feature allows you to exchange multiple assets on the ShibaSwap platform.
How to start trading with ShibaSwap
To begin using the ShibaSwap platform, you will have to connect a compatible crypto wallet.
The three compatible options listed by the platform include Metamask, Coinbase Wallet, and WalletConnect. Wallet Connect allows you to connect web3-enabled mobile apps to connect to ShibaSwap.
Once you have connected your wallet by signing the transaction to connect, you can start exploring the ShibSwap ecosystem.
Remember, you will need to top up your wallet with an amount of ETH that can cover gas fees and convert it into SHIB, LEASH, and BONE tokens if you plan to begin staking or providing liquidity.
Is https://shibaswap.com/ safe?
According to blockchain security ranking service CertiK, ShibaSwap has a current safety score of 93/100 and resolved 97% of the 34 issues raised during the platform’s extensive audit. This puts ShibaSwap above the likes of decentralized finance (DeFi) heavyweights Aave and Polygon, which both scored 92/100.
In addition to this, 96% of CertiK users voted they felt ShibaSwap was a secure service. However, this metric should not be relied upon alone when assessing a platform’s safety.
Whenever investing in DeFi platforms, it’s always advisable to carry out your own rigorous due diligence and educate yourself on the associated risks.