ShapeShift shuts down

ShapeShift shuts down to completely decentralise its operations

Crypto management platform ShapeShift is looking towards the future by decentralising operations and completely shutting down the company as announced in a blog post by its chief executive officer, Erik Voorhees last July 15.

‘With an eye toward the future, ShapeShift has begun decentralizing,’ wrote Voorhees in the announcement. 

As it undergoes its months-long process of evolving into a decentralised autonomous organisation (DAO), the control of ShapeShift will migrate to stakeholders and investors of Fox Token, Shapeshift’s native coin. 

DAO is an internet-native constitution with an embedded set of rules and principles that governs its structure and activities. Through this model, ShapeShift activities will be transacted autonomously based on specific programming conditions.

Moreover, the company is also set to airdrop around US$98 million in crypto assets to decentralised finance (DeFi) investors across multiple blockchain platforms as part of the shutdown process. 

According to ShapeShift, all of the remaining supply of FOX coins will be distributed through airdrops to various addresses. The initial liquidity mining officially started on July 16 and is set to distribute more than 340 million FOX coins over the next months.

In a report released by Coinbase, the breakdown of the coin distribution is as follows:

  • 34% of assets will be distributed to the ShapeShift community and other crypto communities;
  • 32% of assets will be distributed to the remaining ShapeShift staff;
  • 24% of assets will be sent to the DAO;
  • 7.5% of assets will be sent to the ShapeShift Foundation which would manage the remaining activities; and
  • 1.3% of assets will be used for company operations as it winds down.

Over 900,000 addresses of past ShapeShift users, as well as 120,000 addresses on well-known DeFi protocols including Gitcoin, Uniswap, SushiSwap, Aave and THORChain, are eligible for the airdrop. 

During the initial announcement made by Voorhees, FOX coins shot over 300% in value in a span of a few hours. The coin reached an all-time high market value of US$1.16 on July 15 but managed to retract to US$0.65 as of current press time. 

Clash against crypto regulators

Voorhes admitted that crypto regulators are part of the reasons for the ShapeShift decentralisation and shut down. 

‘Regulatory friction absolutely has a part in this decision,’ Voorhes said during his appearance on CoinDesk TV’s First Mover’ segment. 

Voorhes has struggled with regulators since his earlier stints in the crypto industry. One of his crypto platforms, SatoshiDice, was fined US$50 thousand by the US Securities and Exchange Commission (SEC) for failing to register an offering in 2014. 

Moreover, recent crackdowns in the UK and China have pulled the rug under the industry, causing the crypto market to dive, with the prices of digital assets such as Bitcoin and Ethereum dropping. 

‘I wish there were more people willing to be brave and to push boundaries and fight for principle instead of just trying to get along and make some profit,’ Voorhees told CoinDesk TV. ‘Ultimately, if you’re custodial you’re never really bringing the most important attributes of cryptocurrency to your users.’ 

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