ShapeShift (FOX)

Basics

• Is based in Switzerland, Zug
• Was founded in 2013
• ShapeShift is an exchange that supports a variety of cryptocurrencies including Bitcoin, Ethereum, Monero, Zcash, Dash, Dogecoin and many others.
• Testnet release:
• Mainnet release:
• ShapeShift does not allow users to purchase crypto’s with debit cards, credit cards or any other payment system. The platform has a no fiat policy and only allows for the exchange between bitcoin and the other supported cryptocurrencies.

History

• Shapeshift used to be great for those who want to make instant straightforward trades without signing up to an account or relying on a platform to hold their funds. However this changed after a move to membership accounts in september 2018. Soon SideShift was created as an alternative.
• This was once again changed with the launch of FOX and the announcement of decentralizing into a DAO (14-7-2021).

• From The Defiant (29-1-2021):

"ShapeShift has never been decentralized. So it was noncustodial and we didn't hold customer funds. But it was a central company, and when a customer did a transaction, we would receive, ShapeShift the entity would receive coin A and send coin B out to them from our own wallets, our own inventory. So yeah, it was never a DEX.

Fast forward two and a half years, just a few weeks ago and we have changed our model, such that we're not an intermediary anymore, we've stopped trading with customers entirely, and instead, we have integrated decentralized exchanges into ShapeShift. So now when customers trade, they're trading from the customer to the DEX, instead of from the customer to ShapeShift. That means we are not an intermediary, and that means that we do not need to do KYC or run compliance on that because it is not a regulated activity. So that was a huge, profound change that we've been working on over the last six months and just went live on January 6th."

Audits & Exploits

• According to ShapeShift, it has given approximately 40k in rewards for bug finds (26-10-2021).
• Scored 90% on DeFi Safety (26-10-2021):

"Activity is 10+ transactions a day on contract FOX Staking Rewards, as indicated in the Appendix.

At 2,654 commits and 3 branches, the Fox staking repository is the extensive foxhole network the developer's would like it to be. As per https://raw.githack.com/shapeshift/fox-staking-unified-history/master/coverage/index.html, ShapeShift has a 91% code coverage.

Multiple audits were performed before the public deployment of multiple of their smart contracts. Notably, the token, and the staker, and airdrop contracts have all been audited pre-launch."

Bugs/Exploits

• From CoinDesk (27-8-2020):

"ShapeShift has sued its former senior engineer in Colorado Federal District Court for damages caused by his alleged theft of $900,000 in bitcoin. As detailed in the exchange's Wednesday demand for jury trail, Azamat Mukhiddinov allegedly siphoned 90 bitcoin away from his employer via "malicious code and programs" he is accused of having installed on its servers. Executives said they discovered the $900,000 hole in the company's balance sheet on May 21 and traced it to Mukhiddinov within days.

Mukhiddinov has already made the company whole, the company said. He quickly paid it back via wire transfers, cash-packed "duffel bag" handoffs and bitcoin payments, according to the lawsuit. ShapeShift now wants Mukhiddinov to pay currently unspecified damages for the time and effort employees spent cleaning the exchange's servers of his bitcoin-stealing code."

Governance

Admin Key

• From DeFi Safety (26-10-2021):

"Immutability of contracts and absence of owner privileges are clearly described. Although no pause control function exists in the ShapeShift code, their smart contracts are entirely immutable, and the protocol functionalities that do not make pause control functions a necessity are described."

DAO

• From the FOX announcement (14-7-2021):

"Starting today, we begin open-sourcing the ShapeShift project, dissolving our corporate structure toward zero, and re-organizing around a borderless, decentralized community governed by the holders of the FOX token."

• From their airdrop page (16-7-2021):

"The ShapeShift DAO is powered by SafeSnap (SnapShot + Gnosis Safe)

FOX holders will eventually govern all important decisions of the project. This includes governing the ShapeShift DAO—a new DAO treasury endowed with over 240,000,000 FOX Tokens (24% of all FOX).

What types of decisions could ShapeShift DAO governance control going forward?

1. Which protocols and assets to integrate.
2. How to spend or invest funds in the ShapeShift DAO, such as:
   • Funding community initiatives like liquidity mining, Rainfall, FOX Fuel, and FOX rewards or other new initiatives.
   • Which products or services to build.
   • Hiring contractors to build those products or services (and selecting those hired).
3. Whether to add or change fees for using the ShapeShift interface (currently, ShapeShift does not add any fees but has the capability to turn these on). Examples of this today include: fees on 0x trades, fees on THORChain trades, fees on LP tx’s through THORChain, and fees on fiat purchases through Banxa.
4. And any other ideas contributed by our customers and community."

Treasury

• From the FOX announcement (14-7-2021):

"A DAO treasury of roughly 1/4 of the FOX supply has been placed in the hands of these holders."

Token

Launch

• Got airdropped to over 1M addresses (14-7-2021).

Token Allocation

• From their airdrop page (16-7-2021):

1. "Over 60% of the total FOX supply of 1,000,001,337 tokens has been allocated to the ShapeShift community.
2. In addition, over 120,000 Gitcoin, Uniswap, SushiSwap, Yearn, Aave, Alchemix, 1inch, Curve, Balancer, and 0x token holders, and most THORChain users, are eligible."

• From their website (16-7-2021):

"Total Supply: 1,000,001,337 (no inflation)

1. 340,000,000 (34%) granted to the ShapeShift customers and DeFi community via airdrop
2. 320,000,000 (32%) granted to employees and shareholders
3. 242,000,000 (24%) granted to ShapeShift DAO (governance treasury)
4. 75,000,000 (7.5%) granted to the Foundation
5. 13,000,000 (1.3%) retained by ShapeShift during decentralization process
6. ~10,000,000 (1%) already in circulation with >21,000 holders

The active (unlocked/unvested) supply at the time of the airdrop, approximately 438M FOX, is roughly 75% in the hands of the community:

1. 10M + 340M held by community
2. 75M + 13M held by ShapeShift
3. All other buckets are on three-year vesting"

Utility

• Governance, fee reimbursements and when using ShapeShift you gain tokens (16-70-2021).

Coin Distribution

• Founder Erik Voorhees holds just over 5% of the supply (16-7-2021).

Technology

• Whitepaper can be found here (26-10-2021).
• Code can be viewed here.

Implementations

• Built on: Ethereum, Bitcoin, Binance Smart Chain

Upgrades

• Started using THORChain for its swaps (14-4-2021).

Liquidity Mining

• From their airdrop page (16-7-2021):

"Liquidity mining will begin in 48 hours at 9:00 a.m. MT on Friday, July 16, 2021."

Their Other Projects

• Much-hyped crypto portfolio service Prism was shut down on October 11–for reasons that weren’t made public
• "ShapeShift announced on July 8, 2019, the launch of its latest platform to provide users with an end-to-end solution for securely controlling all aspects of their digital assets. With the announcement of this new noncustodial platform, the five-year-old digital asset company will allow users to buy, sell and trade cryptocurrencies while maintaining full control of their private keys. “The new ShapeShift is arguably the world’s first non-centralized multi-chain digital asset platform,” Voorhees said."

Roadmap

• Can be found here (16-7-2021):

1. Wallet support
2. Open sourcing
3. Additional blockchains
4. DEXs
5. DeFi
6. Layer 2

Pros and Cons

Pros:

• Good reputation, beginner friendly, Dozens of Crypto’s available for exchange, fast, reasonable prices.

Cons:

• Average mobile app, no fiat currencies, limited payment options and tools

Team, Funding and Partners

Team

• Contributors can be found here (26-10-2021).
• Voorhees, Erik; creator, CEO, when he started Shapeshift he was still a Bitcoin Maximalist, but due to Shapeshift he started to see the use cases of altcoins.
• Emily Coleman; CMO
• Shapeshift is laying off 37 employees, reducing the size of its team by a third; reasons for the downsize vary between the decline in price of crypto markets and the changing regulatory environment forced the company to face "immense legal bills"; the regulation forced the company to impose identification on users, which drove away many of its API partners who left for non-KYC competitors

Funding

• Silbert, Barry; investor through Digital Currency Group
• Ver, Roger; first investor
• Acquired hardware wallet Keepkey in 2017

Partners

• Partner with Cointelegraph group, bitpay, blocktrail, jaxx, skry, bitex, surbtc, bitgo, richfund, bits of gold, coinBR.net, BitOasis, KCoin, Bitkan, Unocoin, Bitso, BTCC, Ether.camp, Signatvra, Wings
• Partner with Civic (was on their website as of 7-2019)
• As of 7-2019 on the partner & clients list of ZeppelinOS.
• Partners with Wyre (As of 28-10-2019 on the website of Wyre)

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