What is The Role Of SHA in SafeSwap and How Does It Affects Safe Haven's Tokenomics? - Safe Haven

What is The Role Of SHA in SafeSwap and How Does It Affects Safe Haven’s Tokenomics?

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Posted on Thursday 5 May 2022 at 17:42 Announcements

We are excited the release of SafeSwap is around the corner. As part of Safe Haven’s trusted ecosystem, SafeSwap will not only bring a revolutionary atomic swapping platform to the market, but it adds extra value and important utility to the Safe Haven token (SHA) as well.

So, in order to understand how SafeSwap adds value to Safe Haven’s tokenomics, we need to take a look at how tokens are flowing through SafeSwap.

Let’s take a look at what that means.

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SafeSwap’s Fee Structure

As a reminder: SafeSwap is a decentralized atomic swapping platform that is unlike most swapping platforms out there. SafeSwap operates without user-added liquidity, does not use middlemen and allows smart contracts to operate on multiple supported blockchains.

An example would be a user swapping SHA from VeChain (VIP180 tokens) to SHA on Ethereum (ERC20 tokens).

Click here to read more about how SafeSwap works and what it is »

Just as with any Web3 platform out there, there are some fees involved.

In SafeSwap we can differentiate 3 types of fees:

Fee #1: Default Blockchain Fee

SafeSwap users pay for swaps in native gas tokens of the blockchains involved in the swap. For example Ethereum uses ETH as gas, VeChain uses VTHO.

This fee is automatically calculated based on live gas prices and is fully used to initiate the atomic swap on the source blockchain and to claim the swapped tokens on the destination blockchain.

⚠️ Safe Haven has no control over these fees as it is just how blockchains work.

Fee #2: SafeSwap Platform Fee

For every swap made on SafeSwap the user will be charged a small premium known as the SafeSwap platform fee.

The SafeSwap platform fee will automatically be calculated and added to the total fee before a user initiates the swap.

Here’s a list of the different SafeSwap platform fees charged based on the blockchains involved:

  • Ethereum: 1% platform fee
  • VeChain: 5% platform fee
  • Binance Smart Chain: 5% platform fee
  • Polygon: 5% platform fee

ℹ️ SafeSwap platform fees are paid in the same token as used for gas during the swap.

⚠️ Safe Haven has full control over these percentages and can update these at any time in order to adapt to changing market conditions and blockchain gas prices.

Fee #3: Project Listing Fee

The third fee involved in the use of SafeSwap is not one that’s paid by users, but one that’s paid by projects.

Every project that wants to list their token on SafeSwap and use it to grow their project’s reach and go cross-chain, will be charged a one-time listing fee.

ℹ️ Project listing fees are paid in fiat or a stablecoin.

⚠️ The exact project listing fee is variable and is considered as classified business information of Safe Haven.

SafeSwap’s Reward System

Since fees are either paid in native gas tokens (SafeSwap platform fee) or in fiat/stablecoins (project listing fee), you’re probably wondering how SHA is involved here and how SafeSwap will make SHA more attractive to investors and long term holders.

Or what about SafeNode owners, how will they be rewarded?

Well, it’s quite simple and straightforward:

All fees across the entire SafeSwap platform will be split into three different parts.

Part #1: Foundation Pool

In this pool the foundation will hold fiat and stablecoins from the project listing fees and the different native gas tokens that are collected via SafeSwap platform fees. 

50% of the SafeSwap platform fees and 70%* of the project listing fees will be sent to the Foundation Pool.

* 30% of the first $10,000 of a project’s listing fee will go to the SafeNode Rewards Pool

Occasionally a part of the foundation pool will be used to market buy and hold SHA tokens, but the Foundation Pool will mainly be used for further business development and accelerate project growth.

So far, nothing special for SHA tokens, but the fun has yet to begin.

Part #2: SafeNode Rewards Pool

A big part of SafeSwap’s reward system is centered around benefiting our community and in particular the SafeNode owners. 

This means that the SafeNode Rewards Pool will be fully dedicated to a continuous SHA Buyback Program and thus will be used to market buy SHA off exchanges.

You read that right, every swap being made on SafeSwap will indirectly cause demand for SHA tokens to go up since a part of the SafeSwap platform fee will be used to buy SHA.

To be precise: it’s 45% of the SafeSwap platform fee that will be sent to the SafeNode Rewards Pool.

Same goes for every project being listed on SafeSwap. They pay a project listing fee and as mentioned above, 30% of the first $10,000 of a project’s listing fee will be added to the SafeNode Rewards Pool too.

All these SHA tokens that are market bought with the SafeNode Rewards Pool will then be distributed to SafeNode owners.

Distribution of SHA tokens will, as always, be based on node tiers and how many nodes that are active in that particular tier.

As a direct result, there will be higher demand for SHA in the market due to growing attractiveness in owning a SafeNode.

Please take notice of the following: SafeSwap is a decentralized, extremely safe, and easy to use atomic swap. To remain attractive to use for a large number of swaps, the swap fee has to stay low. With every listing of a new project and blockchain, the number of swaps is expected to grow.

Part #3: Permanent Token Burns

Besides using a % of the SafeSwap platform fees and project listing fees to market buy SHA tokens and distribute them to SafeNode owners, the best parameter is yet to come.

It’s also probably one of the biggest advantages to investors and long term SHA holders related to the introduction of SafeSwap:

SafeSwap will make SHA a deflationary asset.

How?

By also using a % of the SafeSwap platform fees to market buy SHA tokens and permanently burn them by sending them to a burn wallet.

So the more projects that will be listed, the more swaps that will be made.

The more swaps being made, the scarcer SHA will become and the more attractive it will become as an asset to hold.

Utility up = token supply down.

Conclusion

The introduction of SafeSwap will not only give projects the ability to go cross-chain and help VeChain amongst others grow across different blockchains, it will also add massive value to SHA.

SafeSwap will make SafeNodes more attractive to own as a community member, it will make SHA more attractive and it will make SHA more attractive for long term holders.

The synergy between SafeSwap and SHA sets the stage for increased utility of SHA across the full Safe Haven ecosystem!

Are you ready?

Because we are!

Blockchain Project Owner?

SafeSwap V1 will be supporting EVM chains like VeChain, Ethereum, Binance Smart Chain and Polygon/Matic. If you’re a blockchain project owner and you’re feeling the need to take your project cross-chain, get in touch with us via our contact page, we might be able to help each other out and add value to each other’s project! 

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