ShibaSwap is a decentralised digital currency trading platform for the Shiba Inu ecosystem. It’s an exchange where investors can trade between the Shiba tokens. The SHIB — its original token takes after Dogecoin, a meme or joke crypto-asset backed mainly by Elon Musk.
Likewise, Uniswap is a decentralised crypto asset trading site running on the Ethereum blockchain. Decentralised trading platforms aren’t regulated by a central or single authority, which results in faster transactions and increases user participation.
In this post, we go over the Uniswap and ShibaSwap platforms and compare the passive income opportunities.
Uniswap is among the most well-known Ethereum-based decentralised trading platforms. It’s a protocol created for investing ECR-20 tokens and generating liquidity on the ETH blockchain. It uses the Automated Market Maker (AMM) model, facilitating permissionless and automatic crypto asset trading through liquidity pools rather than conventional investing involving sellers and buyers.
As an automated market maker user, you provide liquidity pools using your digital assets. The prices depend on a math formula. Think of automated market makers as bots that rely on constant algorithms to offer you prices between crypto asset pairs.
Because AMM does away with the seller-buyer model, investing time on decentralised exchanges reduces significantly. Additionally, by getting rid of the need for KYC authentications, these AMM-based trading platforms generate more liberal sites that facilitate decentralised token exchange.
Inaugurated in November 2018, Uniswap is among the first successful decentralised finance protocols that have laid the groundwork for other decentralised exchanges that uses its features. A well-known example is PancakeSwap, Uniswap’s offspring chain, which operates on the ETH blockchain.
As of 16th October 2021, the platform had a $1.6 billion 24-hour trading volume and a $3.15 billion TVL. The current version, Uniswap V3, was established on ETH on 5th May 2021. Uniswap has a regulating token named UNI, launched In September 2020. As of 16th October 2021, the token had a $16,984,970,339 market capitalisation and is ranked 11th on Coinmarketcap.
Let’s go over the passive income opportunities available on the Uniswap platform.
How Can One Earn Passive Income On Uniswap?
The best way to make passive income on the Uniswap platform is by supplying liquidity, i.e., trading your digital assets in liquidity pools to facilitate exchanges on the site. Uniswap V3 has some new improvements to the protocol, the most notable being “concentrated liquidity” to enhance capital efficiency.
This translates to a 4,0000X more capital efficiency, better than what V1 and V2 offered. This means that your token operates more efficiently. Consequently, you receive more rewards for supplying liquidity in the latest version.
Suppose you are a new user who wants to supply liquidity. In that case, you must first go over the Uniswap V3 essentials ― setting the price ranges, representing your Liquidity Pool (LP) place, using the appropriate fee tier, e.t.c.
In the previous Uniswap versions (V1 and V2), users got ECR-20 tokens representing their liquidity position in the pool. In Uniswap V3, users get Non-Fungible Tokens (NFTs) representing their liquidity positions. Every liquidity placement comes with a generative art piece.
The NFTs streamline the LP positions representation in specific price ranges. It’s a cutting-edge innovation in decentralised finance, which before Uniswap V3 represented LP placing through ECR-20 tokens. Users can claim the NFTs for the crypto assets they’ve invested in the pool.
Experts warn against trading your Uniswap NFT on marketplaces such as OpenSea or Rarible since you may trade it for way less than its value in actual liquidity. To start supplying liquidity on Uniswap, do the following:
- Visit the Uniswap website to trade and choose your preferred pair via the Pool dashboard
- Choose your preferred charge tier between 0.05% and 1% LP charge
- Select the price range within which you wish to supply liquidity
- Key in the amount you’ll use as capital, authorise the router contract, and deposit the cash with a transaction. Once the transaction is complete, you’re now a Uniswap V3 LP
- You’ll receive a Uniswap V3 NFT LP token, which you’ll have to observe as it represents and assist you in redeeming your LP at your discretion
Inaugurated on July 6, 2021, ShibaSwap, is the Shibu Inu token’s decentralised trading platform.
Decentralised trading facilitates trustless transactions where users can run their transactions without requiring go-betweens or intermediaries to make them happen. The platform runs on the Ethereum blockchain and enables the trading of Shiba Inu coins and other digital assets.
Shibu coins include BONE, LEASH, and SHIB. Interestingly, there are various ways users can participate in this fairly new decentralised trading site. Users can Swap, woof, Bury, Dig, and Fetch. Let’s look at each of these activities in length:
As the name implies, this feature lets users exchange tokens on the Ethereum blockchain for other tokens. For instance, you can swap Ethereum for Shiba and other tokens. It has a straightforward and user-friendly interface that allows users to swap easily.
Users can stake or bury tokens on the ShibaSwap platform to receive Woof returns corresponding to their contribution to the burying pool. Burying involves locking up a portion of your digital assets for a specific time to support the blockchain’s operations and security.
By staking BONE, SHIB, or LEASH, users earn the tokens tBONE, xSHIB, or xLEASH. The tokens represent your staking pool shares. Woof returns are usually released weekly.
Nevertheless, the longer you stake the tokens, you earn more returns. Conversely, regularly unstaking and staking reduces your long-term returns.
The stake feature has a procedure that ensures open returns distribution among users that functions separately for every token — tBONE, xLEASH, and xSHIB. You can redeem 33% of your Woof gains every week; however, the other 67% remains locked for six months.
WOOFING refers to withdrawing or depositing your SSLP to claim your expected BONE rewards. You have to deposit your ShibaSwap Liquidity provider tokens to claim the rewards.
This feature is all about offering liquidity. Liquidity provision involves financing a liquidity pool using your digital assets to support exchange, making passive income on your deposit.
As a liquidity supplier on the ShibaSwap, you receive BONE rewards on investments proportional to your pool’s share. Your gains accumulate in real-time, they’re added to the pool, and users can claim them by withdrawing their liquidity.
ShibaSwap also has an NFT marketplace where users can trade up to 10,000 strange Shiboshis. According to the Shiba project lead, Shytoshi Kusama, the Shiboshi NFTs have released on the 14th of October at 5.30 pm EST. Users should expect the launch of Ovishere, a Shiba-based NFT game, in future.
This feature deals with analytics referred to as “dogalytics”.Bonefolio has an interface that displays individual tokens with columns showing liquidity, BONE gain pools, 24/7 trading fees and volume, and Sushi Liquidity Pairs.
Compared to Uniswap, ShibaSwap offers more opportunities for users to earn passive income. ShibaSwap has two main passive income opportunities ― DIGGing and BURYing, which stand for supplying liquidity and staking, respectively. Uniswap mainly deals with supplying liquidity on its interface.