Almost every crypto investor has heard of the Shiba Inu (CCC:SHIB-USD) token at this point. The altcoin is noted for its massive gains in the year to date, and it doesn’t look like it’s quieting down anytime soon. Many investors want to buy in and hold the token. But, by simply buying and holding onto SHIB, are you getting the most out of the currency? Quite honestly, no. Thanks to the robust Shiba Inu ecosystem, there are a number of ways you can earn even more on your investment. Here is ShibaSwap explained.
The ways to earn on Shiba Inu continue to grow. Earlier this year, the token implemented its own decentralized exchange (DEX) onto the Ethereum (CCC:ETH-USD) network, called ShibaSwap. Through ShibaSwap, users can task their assets with a variety of different functions in order to earn passive income.
If you’re just holding your SHIB in a wallet, you’re probably still earning. But if you want to see the true potential of the assets, you should be utilizing the full Shiba token ecosystem. Of course, for someone who might not know much about the ecosystem, or about the functions of staking and providing liquidity, the process can be confusing. Here’s everything you need to know, from Shiba Inu’s sibling tokens to how you can use them best.
SHIB Isn’t the Only Token in the ShibaSwap Network
To understand how to use your SHIB, you must first understand SHIB’s sibling tokens. There are three tokens in the Shiba Inu ecosystem. Dogecoin Killer (CCC:LEASH-USD) is one of these, most commonly referred to simply as Leash. The other token is Bone (CCC:BONE-USD).
Leash came about as part of Shiba Inu’s efforts to overtake Dogecoin (CCC:DOGE-USD) as the most popular puppy-themed cryptocurrency. Leash originally leveraged Dogecoin’s prices as a way of accruing value. Essentially, Leash prices were controlled by an algorithm which constantly tweaked the supply of the LEASH token. This algorithm would ensure that LEASH prices are always 1,000 times larger than the price of Dogecoin at any given time. Leash no longer operates in this fashion. Rather, it’s now more of a store of value, holding its near-$2,000 value thanks to a very limited total supply.
Bone is the newest token of the three, representing the governance aspect of the ShibaSwap decentralized network. See, Shiba Inu’s network employees a decentralized autonomous organization (DAO) to make decisions on the network. This is considered the most truly democratic way to operate a network, seeing as everybody who owns a governance token holds voting power. Bone is that governance token, allowing holders to vote on initiatives. Holding more Bone gives you more voting power.
ShibaSwap Explained: Why You Should ‘Train’ Your SHIB
Of course, you can simply hold SHIB or LEASH and let their values appreciate. But, in doing this, you are sacrificing the full potential of these assets. Rather, it’s better to become acquainted with the “dig” and “bury” functions to understand how they can earn you more tokens on top of your existing holdings.
You can dig or bury each of the three ShibaSwap tokens. Digging is the network’s liquidity providing function, while burying is the staking function. Just like every other DEX, you can provide liquidity to the platform to ensure that it holds enough assets to execute every transaction; this is digging on ShibaSwap. Burying is the same staking you would find on any proof-of-stake network.
Burying Yields Different Rewards for Different Assets
While you can bury or dig any of the three tokens, the yield you earn back from these functions is always Bone. Bone is the only token which continues to be minted by the network, yet it is a very important function of the ecosystem given its governance power. More so, it’s a token which continues to build value, tripling over the year.
The bury function allows users to stake their Leash, SHIB and Bone for xLEASH, xSHIB and tBONE, respectively.
When burying SHIB, users earn 3% of Bone minted with each new block of data. What’s extra special about xSHIB is that it also nets users a percentage of all ETH transaction fees on the ShibaSwap platform and part of those fees converted into SHIB tokens.
Leash burying yields just 1% of Bone minted per block, but it also nets users part of all ETH transaction fees converted to Leash. This can be especially lucrative, seeing as the Leash supply is so low and the token’s value is so high.
Like Leash, burying Bone earns 1% of Bone minted per block, as well as the fee percentage converted to Bone. Of course, this type of yield farming is very appealing to those looking to vastly up their DAO voting power.
Of course, this function requires a bit of patience. When you wish to cash out and un-bury your assets, you can only withdraw 33% your rewards. For the other 67%, you must wait six months.
ShibaSwap Explained: Digging
By digging your tokens, you are doing a great service to the platform. Through digging, you provide the platform with the liquidity necessary to fuel each and every transaction on the exchange. By digging SHIB, Leash and Bone, you receive your token back as a ShibaSwap Liquidity Protocol (SSLP) version of the asset.
In digging SHIB, your SHIB temporarily swaps out for SHIB SSLP. SHIB SSLP is a sort of placeholder token which you will then trade back for your SHIB when you want to un-dig it. While the tokens are dug, users passively earn Bone.
While digging Leash, you swap your LEASH for LEASH SSLP, and you earn the same passive Bone rewards as SHIB diggers. However, there’s an extra reward for Leash diggers. While digging Leash, users also earn 0.1% on every USD Coin (CCC:USDC-USD) and every Wrapped Bitcoin (CCC:WBTC-USD) transaction on the platform.
Digging Bone involves exchanging BONE tokens for BONE SSLP. And as is the case with the other two tokens, you can earn additional Bone rewards by digging. Unlike the other two tokens, though, Bone diggers gain 0.1% of all Dai (CCC:DAI-USD) and Tether (CCC:USDT-USD) transactions on the platform.
As is the case with burying, users can only receive 33% of their total rewards when they want to stop digging; the other 67% is dealt after six months.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.