ShapeShift is joining seven other DeFi projects in rolling out the platform’s native “branded dollar.”
Through a partnership with the stablecoin platform ICHI, every oneFOX token will be pegged to the U.S. dollar and backed by ShapeShift’s native FOX token and another popular stablecoin, USD Coin (USDC). Similar “oneTOKENS” already exist for Uniswap, Filecoin, Dodo, Perlin Network, 1inch Network, and Fuse Network.
Unlike traditional stablecoins like Tether’s USDT and Circle's USDC, oneTOKENS are fully controlled by the project that launches them.
To mint its native stablecoin using ICHI, community members need to supply one part native cryptocurrency (i.e. UNI, FIL, FOX) and one part USDC. The ratio of the native asset to USDC varies from project to project.
Perlin’s branded dollar, for example, has a minting ratio of 98%, meaning users need $98 worth of USDC and $2 worth of PERL to mint 100 onePERL tokens. Conversely, Filecoin is 95%. FOX token holders will have an 80% minting ratio.
Minting the native asset is inherently beneficial for a project, said Bryan Gross, a steward for ICHI. “Unlike both USDC/USDT and DAI, ICHI helps projects convert total locked value into actual assets under management,” he told Decrypt via email. Thus, instead of having to sell FOX tokens for a stable asset, negatively affecting FOX’s price action, these tokens are removed from circulation at the time of minting.
This increases the scarcity of FOX and increases its price, Gross added.
ShapeShift makes moves
In July, ShapeShift morphed into a decentralized autonomous organization (DAO) and airdropped FOX tokens to over 900,000 users in order to incentivize governance participation. Prior to this change, ShapeShift was a centralized cryptocurrency exchange founded in 2014 by Erik Voorhees.
As a decentralized exchange, token holders are now responsible for voting on developments for the platform rather than a corporate entity.
Now, with today’s news, these same token holders will have access to a FOX-based stablecoin just for ShapeShift.