Launched in July 2021, ShibaSwap is a fork of SushiSwap, a popular DEX that is itself a fork of Uniswap (UNI), 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) tokens.
What are Shiba Inu tokens?
ShibaSwap uses three primary tokens: SHIB, Doge Killer (LEASH) and Bone (BONE).
Shiba Inu (SHIB)
SHIB is a Dogecoin-inspired memecoin created in August 2020 by the pseudonymous “Ryoshi."
During its initial coin offering, the founder(s) distributed one quadrillion SHIB, with half allocated to Ethereum co-founder Vitalik Buterin. Later, Buterin donated 50 trillion SHIB to an Indian COVID-19 relief fund while sending the rest of the 450 trillion tokens to a dead wallet.
Meanwhile, the remaining 500 trillion SHIB were locked in Uniswap and the owners discarded the private keys.
Doge Killer (LEASH)
As the name suggests, Doge Killer (LEASH) arrived as a part of SHIB’s effort to knock Dogecoin (DOGE) off its pedestal as the top memecoin by market capitalization. In its earlier days, the token saw a failed 1:1000 peg to the price of DOGE.
LEASH functions as an ERC-20 token with a fixed supply of 107,647 tokens.
Bone (BONE) serves as a governance token within the ShibaSwap ecosystem. In other words, holding BONE enables users to propose and vote on changes to the ShibaSwap protocol through the Shiba Inu Doggy DAO.
BONE’s maximum supply is 250 million coins.
How does ShibaSwap work?
ShibaSwap enables users to trade supported ERC-20 tokens directly with one another. The DEX’s most liquid tokens are Shiba Inu ecosystem coins, with data showing that BONE and LEASH have the highest trading volumes and order book depths.
Owners of SHIB, LEASH and BONE can stake or BURY their coins into ShibaSwap pools for a specific timeframe to earn pre-determined annual percentage yields (APY). These yields get paid in the wrapped version of the staked tokens. For instance, staking 1 LEASH yields users 1 xLEASH.
The pools distribute rewards weekly, but users can claim one-third of the amount. The rest of the staked capital gets vested for six months.
Liquidity Pools (DIG)
ShibaSwap grants users trading fee rewards (0.3% per trade) proportional to the liquidity they provide to its coin pairs. The rewards are handed out as Shiba Swap Liquidity Provider (SSLP) tokens are redeemable for BONE tokens whenever the liquidity provider wants.
Yield Farms (WOOF)
SSLP holders can deposit these tokens to ShibaSwap’s yield farm pools to earn BONE rewards. This reward mechanism is similar to BURY, where users redeem one-third of the rewards instantly but need to lock the rest for six months.
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ShibaSwap allows users to voluntarily burn their SHIB holdings, i.e., sending the tokens to a dead address. In return, the platform rewards the users with Ryoshi Token (RYOSHI), an ERC-20 token explicitly created as a burn reward.
ShibaSwap also enables the minting, customization and trading of native nonfungible tokens (NFTs) called “Shiboshis.” These 10,000 digital collectibles of the Shiba Inu mascot cartoons will likely be a part of the gaming project called the Shiboshi Game.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.