ShapeShift Settles SEC Charges It Sold Crypto Securities
The federal regulator instituted a cease-and-desist against ShapeShift, which dissolved its U.S. crypto exchange in 2021.
UMA Token Surges By 28% Despite General Bearish Trend
UMA (UMA) has registered an impressive 28.7% gain in the last seven days, according to data by CoinMarketCap. In a week marked by market losses and little gains, the DeFi token showed much resilience to emerge as one of the biggest weekly gainers.
Although most of the market stands in awe of the stunning bullish performance of the popular meme coin – PEPE -, UMA’s remarkable price gain has recorded much profit for its investors, drawing significant attention.
UMA’s Price Action
Initially, UMA began trading the week around a price region of $1.95. The token showed no significant movement until two days after when it attempted a bullish run but couldn’t break past the resistance level at $2.31.
On May 5, i.e., yesterday, UMA experienced a hike in its market price, gaining by over 43% to move from $2.18 to break above the $3 price mark for the first time since August 2022.
Although UMA’s price has since slipped from such high levels, the DeFi token appeared to have found support and could be gearing for another breakout.
At the time of writing, UMA is trading around $2.55, with a 0.22% loss in the last 24 hours. In this same period, the token’s trading volume has boosted by a staggering 438.82% to attain a value of $336.70 million.
Interestingly, UMA’s price growth is also reflected by the growing traction on its platform. Based on data from Stelareum, Total Value Locked (TVL) on the UMA protocol has grown from $10.33 million to $11.12 million over the last two days.
UMA Protocol Set To Record New Partnerships
Amidst the impressive market performance of the UMA token, its underlying network appears to make much progress on the adoption front.
According to a tweet yesterday, the UMA Protocol announced that two new DAOs is set to integrate its latest blockchain product, the oSnap module, a unique governance solution aimed at merging on-chain and offchain governance system.
The Optimistic Snapshot Execution, or oSnap as it is known, enables the “execution onchain of transactions performed off-chain immediately but with protections against harmful proposal execution.”
The last protocol to integrate the oSnap module was the popular decentralized exchange, ShapeShift.
That said, UMA generally functions as a decentralized platform that allows other DeFi protocols to build “priceless” financial contracts on Ethereum while providing them with publicly verifiable market data.
In essence, this project functions as an oracle, granting various DeFi protocols the underlying infrastructure to create fast, efficient, and secure synthetic derivatives on the Ethereum blockchain.
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ShapeShift CEO Erik Voorhees expects Bitcoin to reach $40,000 by the summer, while Tim Draper has stood by his $250,000 prediction for the second year running.
ShapeShift moves closer to full decentralization with open-source mobile app
The organization transitioned to a DAO in July 2021 as part of a broader pledge to decentralize its operations.
ShapeShift creates FOX Foundation as intermediary for successful DAO transition
The entity will be dissolved upon the completion of ShapeShift’s decentralization process.
ShapeShift DAO launches NFT auction in support of female artists
Nonfungible tokens have emerged as one of the most popular use cases of blockchain technology, generating billions of dollars in revenue through 2021.
ShapeShift hopes to create ‘rarest and most historical’ NFTs with 80% trading card supply burn
According to the exchange, it plans to retain 16 cards from the blockchain-based game Spells of Genesis to sell before 2022 and give the remaining 16 to its DAO.
ShapeShift issues second token airdrop following decentralization pledge
In a July interview with Cointelegraph, CEO Erik Voorhees described full decentralization as an “iterative process” that can take many years.
ShapeShift open-sources its upcoming version 2 platform code
The Erik Voorhees-led company is making strides to fully decentralize its corporate structure. In July, ShapeShift announced the largest airdrop in history as part of its decentralization pledge.
Algorithmic stablecoins show promise of reducing volatility — ShapeShift
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Erik Voorhees is embarrassed by toxic Bitcoin maxis and told a podcast: “I don’t know when they got into Bitcoin, but absolutely that is not the community that I come from in Bitcoin.”
ShapeShift Will Cease To Exist As A Company. It’ll Be Reborn In Another… Shape
In 2014, Erik Voorhees founded ShapeShift. By the end of 2021, ShapeShift will cease to exist as a company. It will become a DAO, a Decentralized Autonomous Organization. The owners of their FOX token will have complete governance over it, and they will “Open source all ShapeShift code and infrastructure.” That’s according to the company’s official announcement, which also states:
It has become clear to us that decentralization is the only way to achieve borderless, immutable finance. Therefore, decentralizing ShapeShift is how we choose to maintain fidelity to the principles first established by Satoshi and the Bitcoin whitepaper.
In Voorhees own blog post about the change, the CEO promises, “Our corporate entities will be dissolved completely toward the end of the process.” Voorhees also details all of the red tape they encountered while trying to establish ShapeShift’s vision, and states that right now, “The frictionless trading of digital assets across chains, without custody, done in a manner that respects and protects users is once again possible.”
Related Reading | After Crypto Giants Bitmain & ShapeShift Cut Staff, So Does Blockfolio
In a phone interview with Coindesk, the CEO gave them a candid answer that explains the situation plainly:
“It’s definitely radical. A year ago I would have thought this was sort of fanciful, but at this point I’ve seen how this tool is getting built and I’ve seen how these communities get built around a token instead of an equity structure. The fact that ShapeShift is really closing its corporate entity sets it apart.”
It really does. ShapeShift’s navigating uncharted waters.
Ok, But, How Will The ShapeShift DAO Work?
In the next few months, ShapeShift will airdrop 340 million FOX tokens all over the DeFi space. The “largest airdrop in history.” Everyone who used ShapeShift in the past is eligible. And users from other well-known DeFi projects will get their share also. The company hopes that the process will spread its seed around, and bring more people into the project.
With time, governance over the entire ShapeShift open-source platform will move to FOX holders. This will be a process in which decision making moves from the fully centralized shareholder/board structure of ShapeShift today to a fully decentralized community/token structure in the future.
Said shareholders aren’t walking away empty-handed. They will have no special privileges, but they can be as involved as they choose. According to Voorhees blog:
Our shareholders will receive all financial assets of the corporation as it unwinds. Further, they have received pro-rata FOX Tokens, which unlock over three years, and with these they can participate in governance going forward. They can be as involved as they wish, but they have no special privileges.
And Voorhees himself will still be heavily involved:
For transparency, I will be the largest FOX holder, with just over 5% of max total supply, unlocking linearly over three years, all on chain. The next largest holder has roughly 1.6%, and the long tail extends from there.
Will the experiment succeed or are they trying to fly too close to the sun?
ETH price chart on Poloniex | Source: ETH/USD on TradingView.com
How Will Voorhees And Company Handle The Transition?
The CEO for the time being explains what they’re trying to accomplish:
Governed by its users, ShapeShift will integrate with the most desired crypto and DeFi protocols, a neutral interface to the future financial system that everyone can influence, and no one can control.
And Voorhees told Coindesk what he thinks their service ultimately is:
“We’re essentially a crypto interface,” Voorhees said, and it has been built with an eye toward integrating with any wallet, app, blockchain or primitive entrepreneurs want to build.
But, how will they get there? Well, there’ll be a foundation, as ShapeShift’s announcement explains:
ShapeShift will establish a well-funded non-profit organization—a Foundation—with the narrow objective to promote and facilitate a transition to a completely decentralized, community-owned project. As sufficient decentralization is achieved, this Foundation has a mandate to dissolve away.
And Voorhees elaborates via his blog:
The ShapeShift DAO treasury has been established, endowed with over 242,000,000 FOX Tokens (24% of max total supply). Any FOX unclaimed from the airdrop after three months will be added to this treasury.
Related Reading | “Check Out Thorchain (RUNE),” ShapeShift CEO Erik Voorhees Says
So, in conclusion, ShapeShift will dissolve and decentralize itself. They will open-source their software and organize around the FOX token. Or, in their words, “economics that revolve around a borderless, liquid token rather than a traditional equity structure bound by jurisdiction.”
What an interesting experiment.
Featured Images by Karen on Unsplash - Charts by TradingView
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