ANNOUNCING SHRINKSWAP: A DEMOCRATIC SOLUTION TO THE RUGPULL PROBLEM
ShrinkSwap (SHS) is an exchange platform with a governance token utilising the Binance Smart Chain that aims to use voting and restricted token listing in a semi-DEX system. Holders of the SHS token will be able to vote on what tokens they want listed on the exchange. Voting will be done without having to send a transaction to prevent voters from having to pay to take part in the system. The voting aims to to prevent rugpulling, by requiring prospective listings to sit in a voting hold for a week before they are allowed to be traded, allowing the community to determine if they find the token legitimate or not. Applicants must provide a liquidity deposit to ensure fair trading occurs when their token is fully listed. The ShrinkSwap website will feature two different exchanges:
The first will be a traditional DEX style exchange, similar to uniswap or PancakeSwap, with simple token swapping, liquidity pools, and yield farming.
The second will be an order-book style exchange, featuring buy-orders and sell-orders, complete with options to market buy/sell or limit buy/sell.
Additionally, the governance token will have some tokens burned with each transaction, depending on the total supply. As total supply decreases, the burning rate will slow. When total supply dips below 100 million, the burning will cease entirely. The aim of this burning is to dampen the effects of sudden increases of supply on the price, thus being more fair to investors.
There is a growing community on telegram, at
https://t.me/shrinkswapAdditionally, we have purchased the domain name
www.shrinkswap.com, though we currently have not made any part of the website public.
We will be doing both an airdrop and a pre-sale
The full whitepaper is here in text form:
INTRODUCTION
The DeFi community has revolutionised finance as we know it – to take the actions of saving, loaning, trading and investing away from institutionalised financial organisations and place them in the hands of a community without a head fundamentally changes the financial balance in the world. In many regards, crypto as a whole is still new. With a market cap of $1.3 trillion USD, the entire value of all cryptocurrencies combined is still lower than a large company like Apple, Microsoft, or Amazon, who’s individual market caps all outweigh the cryptocurrency market cap. Out of this $1.3 trillion in crypto, decentralised finance takes up just a small proportion of that.
Despite its revolutionary nature, the DeFi market is wracked with problems. The most notable among these is scams. Decentralised exchanges are run by automatic contracts that allow anyone to interact with them. This means anyone can list a token on an exchange, manipulate its liquidity, and cause a massive sell-off benefitting themselves when the price has been raised to a profitable level. Too many crypto projects have existed for just one or two days, having their ability to prey on unsuspecting investors enhanced by their ability to list their token without issue.
ShrinkSwap aims to change that, by creating a DeFi platform that is somewhere between the centralised and the decentralised exchange: a semi-decentralised exchange. This sDEX would be run by the legitimate investor and for the legitimate investor, with the platform’s token holders being the sole decider on which new token is allowed to be listed on the exchange.
ShrinkSwap will feature two trading platforms on the same website to exchange tokens on:
1. The Level 1 platform will be a traditional DEX complete with liquidity pools and farms, with only a web3 compatible wallet necessary to trade.
2. The Level 2 platform will be a traditional order book style platform, with the trader setting their own buy and sell orders independent of liquidity.
PLATFORM
The ShrinkSwap platform would utilise voting in three important manners, with voting power determined by SHS (ShrinkSwap) token ownership:
1. To confirm or deny an initial application. To be listed on this platform, prospective token developers will need to fill in a form and provide a liquidity deposit. The form will require the name, contract address, a website, a preferred initial trading pair, and a few sentences detailing the project. All token holders will be given the opportunity to declare their connected wallet’s balance in favour of, or against, the initial listing proposal. A 65% ‘yes’ vote is required to confirm an initial listing. If successful, an initial trading pool will be created with the teams preferred pair and the [name] token on the Level 1 Exchange, using their liquidity deposit. This creates two pools/pairs and two farms. If rejected, the liquidity deposit will be returned to the application maker. The voting period will last for 7 days after the application is made.
2. To confirm or deny further applications building on a successful product. To apply for more pools, more pairs, or more farming, a 50%+1 yes vote is required after a voting period of 72 hours. Applications to build upon an already listed project can be made by anyone when there are less than five pools/pairs existing. Afterwards, further pool/pair applications can only be made with the signature of the wallet that provided the initial liquidity. This is to prevent too many pools/pairs creating thin liquidity for new projects and to prevent trolls or saboteurs from filling up the application line and/or hijacking a project. In the event of a crisis (i.e. lost initial wallet), a double-vote will be held once an application is made by the ShrinkSwap’s executive team. The first vote will grant the executive team the power to make a new pool/pair for a project, and the second vote will confirm the specific proposed pool/pair. If the second vote fails, a new pair will be proposed. If the second vote fails four times, it will count as the first vote failing and the executive’s power will be removed for this project.
Furthermore, projects listed on a level 1 exchange may apply to be moved to the level 2 exchange once three pools/pairs exist. A 75% yes vote is required to list the project on the traditional order-book style level 2 exchange.
3. To confirm or deny direction-changing proposals for the platform as a whole. Applications can be made by wallets that have made at least one trade to change the direction of the platform itself. An example would include a request for the governance token to be listed on another exchange, or for a troublesome admin to resign/be removed. These votes are non-binding but serve as a poll of public opinion for the executive team to take action on.
TOKENOMICS
The SHS token will serve as the token by which voting can occur, and also as an initial pair for projects listing themselves on the Level 1 exchange. Furthermore, holders may stake their tokens in the ShrinkSwap website to join the fee-accruing pool. All trading fees on the level 2 exchange will be 99% distributed to the pool, with each trade’s fee being reserved for withdrawal with each stake-holding address according to their percentage of the total pool at the exact moment the transaction is made.
A unique feature of the SHS token is that each transfer will see some of the transferred tokens burned and removed from the total supply. This will, overtime, shrink the total supply and prevent price suppression occurring from the introduction of new tokens through charity donations and the staking program rewards.
The burning percentages are detailed below:
When total supply is larger than 900,000,000 (900 Million), 0.2% of the transfer will be burned
When total supply is larger than 700,000,000 (700 million) but less than or equal to 900,000,000 (900 million), 0.1% of the transfer will be burned
When total supply is larger than 500,000,000 (500 million) but less than or equal to 700,000,000 (700 million) 0.01% of the transfer will be burned
When total supply is larger than 100,000,000 (100 million) but less than or equal to 500,000,000 (500 million) 0.001% of the transfer will be burned
When total supply is less than or equal to 100,000,000 (100 million) no burn will occur
Total initial supply will be 1 billion tokens, with the following split:
25% presale, fundraising, and planned sales:
1% at $0.025
1.5% at $0.05
2.5% at $0.075
4% at $0.10
4% at $0.20
4% at $0.40
4% at $0.75
4% at $1.00
Any tokens set aside for the presale and not sold will be sold simply on the level 2 exchange to acquire funding
10% for the team initially (voting purposes):
10% for the team once the platform is 6 months into full operations
10% for a staking program on other exchanges
5% for liquidity
10% for marketing (i.e. exchange listings)
5% executive’s discretion/emergency use
0.5% airdropped for free to the earliest enthusiasts
9% for charities and social programs (to be voted on by the community, split 0.5% among 18 charities or programs)
2.5% for worldwide COVID-19 relief programs
3% (subject to change) to gather initial projects pairings. This means we would freely give some tokens to a prospective project to cover their liquidity deposit cost.
The remaining % is to be chosen, and will most likely be used for further charity donations, competitions, bounties, or paying contracted workers
LEGITIMACY
ShrinkSwap aims to preserve its legitimacy by eventually being listed as a company within Australia and, immediately after the first round of pre-sales is completed, to purchase or enrol in the necessary licenses to operate in Australia.
This whitepaper is current for the 29th of June 2021
