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ShapeShift, a leading non-custodial cryptocurrency exchange, is planning to open-source its platform and dissolve its entire corporate structure — an unprecedented move that underscores the company’s commitment to decentralization.
Largest airdrop in history
As part of its decentralization pledge, ShapeShift plans to airdrop 340 million FOX tokens to over one million users who traded $1 or more of Ether (ETH) or any ERC-20 token through the platform prior to June 9, 2021. Both current and past users of ShapeShift are eligible to receive the airdrop. The breakdown of the FOX token distribution is as follows:
- 1-4 trades: 200 FOX
- 5-9 trades: 350 FOX
- 10-24 trades: 750 FOX
- 25-99 trades: 1,500 FOX
- 100+ trades: 8,500 FOX
Wallets registered with ShapeShift that are holding cryptocurrency balances as of June 9 will also receive 250 FOX. Furthermore, users of KeepKey who have connected with ShapeShift as of June 9 are also eligible for 900 FOX.
The airdrop effectively transfers ShapeShift governance rights to the users, who will begin governing the now community-owned platform. Over 60% of the total FOX supply will be allocated to the ShapeShift community. Over 120,000 decentralized finance (DeFi) users from other platforms, including THORChain, Curve, Balancer and Uniswap, will also be eligible to collect FOX tokens through the airdrop.
The first round of FOX liquidity mining will begin at 9:00 am MT on July 16.
Airdrop recipients are not bound by lockup periods, the company confirmed. All employees and shareholders, as well as the ShapeShift DAO Governance Treasury, have a three-year vesting period through June 2, 2024.
Open-sourcing to begin shortly
All of ShapeShift’s code and infrastructure will be open-sourced in the coming months, the company said, explaining that:
“Anything that cannot be open-sourced in the short-term will be run by the Foundation, with the intention of it open-sourcing and decentralizing when possible in coordination with the community.”
The open-sourcing process also seeks to decentralize all protocol functionalities that currently rely on centralized infrastructure, such as ShapeShift oAuth, which allows partners to request third-party applications access from users.
Related: Decentralized insurance could save DeFi from contagion, according to ShapeShift report
Promoting a decentralized future
ShapeShift founder and CEO Erik Voorhees said the decision to dissolve the company’s corporate structure and transfer governance rights to the users was inspired by the DeFi community, which has grown significantly over the past year. Voorhees explained:
“Inspired by the broader DeFi community, we’ll now help pioneer a new model of economic coordination for the 21st century. No corporate entity, no banks and no borders. The tools are ready. Our customers, and the broader crypto community, are now the primary stakeholders of a decentralized, open-source digital asset platform for the world.”
In an interview with Cointelegraph Magazine earlier this year, Voorhees credited DeFi in general and decentralized exchanges (DEXs) in particular for helping ShapeShift reorient its business model back to its original vision, after traditional banking rules forced the company to implement Know Your Customer, or KYC, identity verification procedures.
“I had learned with Satoshi Dice that an economic relationship didn’t need anything other than a public key to send in a transaction, and anything else could be based around that,” he said.
Self-custody.
Decentralization.
Immutability.
Each requires the former.
This is the way.
— Erik Voorhees (@ErikVoorhees) June 16, 2021
ShapeShift’s support of decentralized exchanges began in January 2021 after the platform integrated with Uniswap, Balancer, Curve, Banor, Kyber, 0x and others.
Voorhees has spoken at length publicly about the ethos of decentralization and decentralized planning, also known as market competition. In May of this year, he gave a presentation titled “Decentralization & Use of Knowledge in Society” at the Cryptocurrency and Hayek Conference at George Mason University. In the presentation, he said:
“Amid the volatility, the periodic disasters, the silly dog memes, people often miss just how profound cryptocurrency as a social and economic phenomenon has become. This is a phenomenon where one-and-a-half-trillion dollars of wealth has been created in just over a decade. […] Where lending and exchange markets have formed to trade billions of dollars of value per day and yet which have no office, no CEO and are run by no company.”