ShapeShift: Convenient DEX Aggregation Platform

Filip Dimkovski
By Filip Dimkovski
Head and shoulders photo of Michelle Meyer
Edited by Michelle Meyer

Published September 14, 2022.

ShapeShift's name and fox-logo in blue displayed on a black phone screen, resting against a blue background.

Established in 2014, ShapeShift is a cryptocurrency exchange that has been growing in popularity over the last couple of years. The platform allows users to buy, sell, and trade a variety of cryptocurrencies like BTC, ETH, and BNB, in addition to stablecoins like USDT and USDC. However, ShapeShift has evolved to become much more than just an exchange since its inception.

Now, it's a full-scale DeFi platform that also acts as a decentralized exchange (DEX) aggregator and a portfolio management tool. ShapeShift has successfully partnered with many protocols, allowing it to put together the features of many DEXs and offer their trading pairs. Now, let's dive deeper into what features the platform offers and why it has become so popular.

What Features Does ShapeShift Offer?

Some of ShapeShift's key features are as follows:

Liquidity Providing and Staking

These two features are core pillars of DeFi, and thanks to them, anyone can earn a solid passive income as long as they have some crypto. ShapeShift allows users to earn revenue through its liquidity provider program. Investors can stake their assets on the platform in exchange for a share of the trading fees. As you can already guess, users who provide liquidity earn rewards in the form of FOX, the platform's native token.

Multi-DEX Support

One of the things that makes ShapeShift unique is that it supports multiple DEXs simultaneously. This means that users can trade on many different exchanges through the platform without having to create accounts on each one. This isn't just a convenient solution—it can also be a great earning opportunity. For example, if the price of an asset is different on two platforms, you can use ShapeShift to perform arbitrage and earn money on the price difference.

Instant Swap

ShapeShift also offers an instant swap feature, which allows users to trade one cryptocurrency for another without having to wait for an order to be filled. Namely, ShapeShift has partnered with 0x and THORChain, implementing a cross-chain swapping protocol between cryptos. If you want to buy ETH with BTC without a cross-chain solution, for example, you'd have to sell your ETH for USD and then fill an order for your new BTC purchase. However, with ShapeShift, you can directly swap your ETH for BTC, thanks to the cross-chain protocol.

How Does ShapeShift Work?

Although ShapeShift started as a centralized exchange, it became a decentralized protocol run by a decentralized autonomous organization (DAO). This means that the holders of the protocol's native token (FOX) get to vote on how the project is run and how its future will unfold. Every token is worth exactly one vote, so the more tokens you have, the more impactful you can be on the protocol.

In terms of the actual platform, ShapeShift is pretty straightforward to use. After connecting your wallet, you can start buying, selling, and trading cryptocurrencies immediately. You'll also have instant access to all the DeFi features, like lending, borrowing, and staking. In addition to being available through a website, the platform also has a mobile app for both Android and iOS devices.

The FOX Token

The FOX token is built on the Ethereum blockchain, meaning it's an ERC-20 token. We briefly mentioned that the token is primarily used for governance on the protocol, but it also has a utility use case. Namely, the FOX token can be used to perform DeFi operations like trading, staking, and yield farming on the platform.

Currently, as of September 2022, the FOX token trades at $0.06, with an all-time high of $1.67 reached in April 2021. So, if the token somehow manages to reach its all-time high, there's a potential to earn a 2,600% profit with just one position.

Final Thoughts

All in all, ShapeShift ended up being quite a promising project, despite changing from a centralized exchange (CEX) to a DeFi platform. As a platform, ShapeShift simply offers too many features to be ignored—it's a DEX where you can buy and sell crypto, as well as a platform for DeFi operations like staking, lending, and borrowing.

However, it's worth mentioning that ShapeShift had a small incident in the past. Namely, the platform had a massive security breach in its first couple of years, causing users to lose around $200,000 due to the attack.

Nevertheless, the platform has come a long way since then, and in the last six years, they've operating impeccably.