Blockchain

TrustSwap Review: Making Smart Contracts Mainstream

The cryptocurrency space can be a scary place if you are not careful. There are scammers left and right, and not just in Discord and Telegram. Many cryptocurrency projects have revealed themselves to be nothing short of a ponzi scheme. Some have even ended with a rug pull – the team dumping their share of the crypto on the market and running with the cash.

TrustSwap is a cryptocurrency project that is hoping to change that by using smart contracts. They want to create a new standard for initial coin offerings which will increase the confidence of both investors and developers that their crypto of choice will flourish. Not only that, but they want to make smart contracts mainstream by bringing them to subscription markets, legal services, and much more.

A brief history of TrustSwap

TrustSwap was founded by Canadian entrepreneur Jeff Kirdeikis. Not much is known about Jeff outside of his activity in the cryptocurrency space, which is quite extensive. Jeff is not only the founder of Uptrennd, a decentralized social media cryptocurrency platform, he is also the founder of the Cryptocurency Investing Facebook group which boasts over 160 000 members.

TrustSwap Founder

TrustSwap and Uptrennd CEO Jeff Kirdeikis.

The story goes that in June this year, an investor wanted to buy a large amount of Uptrennd tokens (1UP) at a discount from Jeff over the counter (OTC). Jeff was concerned about this investor selling all their tokens and crashing the price, so he requested a lock-up period for the tokens sold.

TrustSwap License

When the investor recommended using a lawyer, and Jeff realized that imposing this agreement would be easier and more cost effective to implement using a smart contract. Realizing the potential of scaling this up to other use cases, he founded TrustSwap in late June. TrustSwap was officially incorporated on July 7th in Edmonton, Canada as 12170639 Canada Inc, with Jeff as the CEO.

Boxmining And Ivan On Tech

Michael Gu (Boxmining – left) and Ivan Liljeqvist (Ivan on Tech – right). Image via YouTube.

Other notable members of TrustSwap include crypto YouTubers Michael Gu (Boxmining) and Ivan Liljeqvist (Ivan on Tech), who are advisors to the project. Jeff noted in an interview that he lived in Bali for two months with Michael, and that both YouTubers are actively promoting TrustSwap and helping foster partnerships with others crypto projects.

What is TrustSwap?

TrustSwap is a cryptocurrency project which seeks to create smart contracts with real world use-cases. These include cryptocurrency subscription services, automated gift services, employee payroll, and even will execution (automatically releasing funds to beneficiaries). The way TrustSwap describes their business model is “smart contracts as a service”.

TrustSwap Mission

TrustSwap also seeks to create a new standard for issuing cryptocurrency tokens called Trusted Coin Offerings (TCOs). This would require token issuers to use a smart contract which locks any tokens allocated to the project team for a specified period and could even restrict token issuance if development milestones are not met.

How does TrustSwap work?

TrustSwap is essentially an ecosystem of open source Ethereum smart contracts. At the time of writing, this ecosystem consists of SmartLock, SmartSwap, TrustStake, and SmartLaunch.

TrustSwap Audit

The only public document pertaining to Hacken’s initial audit of TrustSwap.

While TrustSwap claims their smart contracts are fully audited, this is not entirely clear. Hacken appears to have only conducted an initial audit of SmartSwap and recommended revisions to the code.

SmartLock Explained

SmartLock is an Ethereum smart contract which allows you to release cryptocurrency payments when certain conditions are met. The creation of each SmartLock contract costs 0.25-0.5% of the amount being locked.

These conditions are customizable to allow for the support of multiple use-cases including recurring payments, future payments, and token lockups for ICOs. TrustSwap hopes that the use of SmartLock for ICOs will become the new industry standard.

SmartSwap Explained

Similarly to SmarLock, SmartSwap is an Ethereum smart contract which allows for trustless peer to peer transactions. This may sound a bit odd given that every transaction made with a cryptocurrency is technically a trustless peer to peer transaction, but TrustSwap means this in a slightly different way.

TrustSwap SmartSwap

SmartSwap allows you to execute a payment that requires the consent of both parties to process. This is essentially what peer-to-peer cryptocurrency marketplaces such as LocalBitcoins and exchanges like Blocksettle currently do. The target use case for SmartSwap is OTC trading, which currently requires a third party to do (usually an exchange). Each SmartSwap charges a 0.15-0.3% commission.

TrustStake Explained

TrustStake is the trademarked term for staking the SWAP token in the TrustSwap network. Staking on TrustSwap is done using a Web 3.0 wallet such as Metamask. There is an unofficial stake unlock period of 7 days, and US residents are technically not allowed to participate in staking.

TrustSwap Staking

Terms and conditions for staking SWAP.

Staking rewards on TrustSwap come from a cut of network fees accrued by those using TrustSwap’s smart contracts. For the time being, staking rewards are being paid using the tokens allocated to TrustSwap development.

Staking rewards are paid every 3 days and distributed proportionally to how many SWAP tokens you have staked. Staking SWAP currently yields around 12% per year (paid in SWAP).

SmartLaunch Explained

SmartLaunch is where TrustSwap’s Trusted Coin Offerings (TCO) are held. All cryptocurrency projects which hold an ICO using SmartLaunch use the SmartLock smart contract. As mentioned, this will lock any tokens allocated to the project team for a designated period of time. This is intended to give confidence to those participating in the ICO (which is now technically a TCO).

TrustSwap Launchpad

The fees for using SmartLaunch (as a project) is 5% of the total USD amount raised by the token sale, plus 2.5% of the initial supply of the tokens being sold. 2% of these tokens are airdropped to SWAP token holders and the remaining 0.5% is allocated to the TrustSwap foundation fund (more on this later). Given that it can cost millions of dollars to host an ICO on exchange, this is quite a bargain.

SWAP token holders are airdropped TCO tokens based on their DASH score and/or SwapScore. These can be calculated using this Google spreadsheet or using TrustSwap’s Discord bot. This is known as Allocation Mining. A user’s DASH score is based on the average amount of SWAP tokens held in their wallet since TrustSwap launched on July 9th.

SwapScore Calculation

The formula used to calculate your SwapScore.

A user’s SwapScore is calculated based on the average amount of SWAP tokens staked in the last 60 days. In contrast to the DASH score, a user’s SwapScore only increases the likelihood of receiving TCO tokens by proxy using an elaborate raffle system involving transferrable NFT launchpad lottery tickets. These tickets can be freely traded between users or sold on NFT platforms such as OpenSea.

All cryptocurrency projects wishing to launch their ICO via SmartLaunch are vetted by the TrustSwap team (primarily CEO Jeff Kirdeikis) and community. TrustSwap has held three TCOs so far. The first was for MobiePay on September 30th, the second was for AuBit on October 20th, and the third was for Coin on November 19th.

TrustSwap (SWAP) Cryptocurrency

TrustSwap (SWAP) is an ERC-20 token used in TrustSwap’s smart contract ecosystem. Though the fees for TrustSwap’s smart contracts can also be paid in Ethereum, a 50% discount is applied when paying those fees in SWAP.

TrustSwap Fees

TrustSwap’s fee schedule.

80% of all network fees paid in SWAP go to SWAP stakers. Of the remaining 20%, 10% goes to the TrustSwap foundation fund, and 10% is burned. Given that SWAP has a fixed supply of 100 million, this makes SWAP a deflationary cryptocurrency. Just over 1000 SWAP have been burned at the time of writing.

Trust Swap Tokenomics

SWAP is also noted as being a governance token which will allow holders to vote on new TCO candidates and vote on how to spend SWAP tokens allocated to the TrustSwap foundation fund. There do not appear to be many details about the TrustSwap foundation fund and a wallet address for the fund is also not noted anywhere. Furthermore, no community governance system exists at the present time.

TrustSwap ICO

TrustSwap’s ICO was held on Uniswap on July 9th. 18 million SWAP tokens were sold at an initial price of 0.005$USD per SWAP. It is not clear how much money was raised by the ICO as the TrustSwap team does not seem to have revealed this information. It was likely between 90 to 200 thousand USD.

TrustSwap Presale

Jeff’s post to the TrustSwap Telegram group about the presale on July 1st, 2020.

According to an early post by CEO Jeff Kirdeikis in the TrustSwap Telegram group, 42 million SWAP tokens were sold OTC in a private sale on July 3rd. This sale was capped to 210 000$USD, corresponding to a presale price of 0.005$USD per SWAP and a 500 million USD fully diluted market cap going into the ICO.

Swap Token Distribution

Of SWAP’s total supply of 100 million, 60 million tokens were sold during the ICO and presale. 20 million tokens were allocated to the TrustSwap team, and the remaining 20 million tokens were allocated to development, legal costs, marketing, etc. Jeff had stated that team tokens would be put into a SmartLock contract, but this does not appear to have materialized.

TrustSwap Price Analysis

The SWAP token has seen better days. The earliest recorded price on CoinMarketCap notes a price of roughly 0.05$USD, which is 10x higher than its ICO price.

Swap Cryptocurrency Price

SWAP saw an impressive bull run in August which took the price to nearly 2$USD. Price has been declining steadily since then and seems to be hovering between 20 and 50 cents.

Where to get TrustSwap Cryptocurrency

The SWAP token is not listed on very many reputable exchanges. In fact, most of the exchanges the token is listed on are known to engage in shady practices such as wash trading. Most of the trading volume appears to be fake, meaning the current price of SWAP might be inflated.

Swap Trading Pairs

The only reputable centralized exchange SWAP is trading on is Poloniex and with very little volume, meaning you’ll likely pay a premium if you are looking to fill your bags. As such, it is advisable to use Uniswap if you want to get some SWAP tokens without too much slippage. Remember that this will cost gas in ETH.

TrustSwap Cryptocurrency Wallets

Since SWAP is an ERC-20 token, it can be stored on just about any cryptocurrency wallet that supports Ethereum. Software wallets for SWAP include the Exodus Wallet and Atomic Wallet (both are for desktop and mobile).

Hardware wallets for SWAP include Trezor and Ledger devices. Remember that if you want to stake your SWAP you will need to use the Metamask wallet which requires ETH for gas.

TrustSwap Roadmap

TrustSwap has a clearly defined roadmap on their website. They appear to have met every major development milestone so far, except for a mobile app which CEO Jeff Kirdeikis had noted would be built by this time at the start of the project.

TrustSwap Roadmap

TrustSwap’s roadmap lists multiple milestones set to occur by the end of 2021. Between now and then, the TrustSwap team is hoping to roll out SmartSubscription, release a decentralized exchange called the TrustDEX and create a cryptocurrency wrapping protocol called SmartWrap.

As the name suggests, SmartSubscription is a smart contract which TrustSwap hopes to pitch to tech giants like Spotify and Netflix so that they can accept monthly payments in cryptocurrency for their services. SmartSubscription will remove the technical hurdles which are currently preventing subscription services from accept cryptocurrency payments such as price volatility.

TrustSwap Phase II

SmartWrap is the centerpiece to “Phase II” of TrustSwap, which will see the project turn their focus from legacy institutions to the cryptocurrency space. They hope to allow “any token on any blockchain” to be wrapped and use on Ethereum. It is unclear whether this wrapping service will be centralized like Wrapped Bitcoin or decentralized like the Ren protocol.

TrustSwap Controversy

In late September, a cryptocurrency project called HatchDAO launched an ICO on Uniswap using TrustSwap’s SmartLock smart contract. This added a vesting schedule to the tokens that were allocated to the team. The HatchDAO ICO was promoted by TrustSwap on Twitter.

Trust Swap HatchDAO

Shortly after the ICO, HatchDAO exit scammed by removing their liquidity from Uniswap. The total amount of money lost is unclear. In the hours which followed, TrustSwap allegedly began banning people from their Telegram group who were accusing TrustSwap of being complacent in the scam.

TrustSwap Response

TrustSwap’s response to HatchDAO. See the first link in the paragraph below to see the post.

Shortly afterwards, TrustSwap highlighted the fact that their smart contracts cannot protect against all types of scams and that they do not vet every project using SmartLock as part of their ICO. CEO Jeff Kirdeikis later addressed the incident on both Medium and YouTube, acknowledging that some changes needed to be made in how the project markets itself. This is now reflected on TrustSwap’s website.

Our take on TrustSwap

To be blunt, TrustSwap is like a sports car that is low on gas with a questionable driver behind the wheel. As a sports car, TrustSwap is an incredible project with a lot of potential. It is also simple by design which is a huge advantage in the cryptocurrency space. It just wants to make Ethereum smart contracts mainstream, and it wants to be the middleman that brings them to a market that is hungry for crypto.

TrustSwap Github

In terms of gas, it is not looking so good. The TrustSwap Github has been dormant since September. Their funding rounds could not have raised more than half a million dollars. Even if they did, this cannot possibly be enough to roll out the products they hoping to have by the end of 2021.It is probably why that mobile app was never made, why the audits have not be done, and why development has allegedly been outsourced to Indian programmers.

TrustSwap Bonus

The extension of TrustSwap’s staking bonus program is the only thing providing meaningful rewards to stakers.

Moreover, the only reason why staking rewards are currently yielding any interest whatsoever is because the SWAP that is supposed to go to development is being used to pay for it. This is arguably necessary to keep community engagement high, but it creates a candle that is burning at both ends. The lack of genuine trading volume also means the team cannot dump SWAP to fund big developments.

Everything seems to hinge on the upcoming SmartSubscription smart contract which could rake in big bucks. The few TCOs launched via TrustSwap should be enough to keep the project on the road until then. What is clear though is that without a significant boost in funding, TrustSwap cannot possibly sustain its trajectory.

TrustSwap Influence

One of many posts by Jeff about TrustSwap and associated projects in the Cryptocurrency Investing group.

Now for the driver. Jeff Kirdeikis is somewhat of an elusive character, which is quite frankly not uncommon in the cryptocurrency space. However, he does run one of the largest cryptocurrency groups in the world, and the TrustSwap whitepaper seems to suggest they are using this reach to sell the project. His activity in the Cryptocurrency Investing group provides evidence in support of this notion.

Trust Swap Fake

Jeff’s post to the TrustSwap Telegram group about the presale on July 8th, suggesting that it raised 1.5 million dollars.

The bigger issue is that Jeff has taken the phrase “fake it until you make it” to a whole other level. For example, prior to the Uniswap listing, Jeff posted in Telegram saying “over 1.5 Million dollars was pledged for the TrustSwap OTC sale” which gives the impression that the sale raised more than the 210 000$USD cap he noted in an earlier message.

TrustSwap ChainLink

TrustSwap has been criticized for being deceptive in its advertising.

TrustSwap is also guilty of the common crime of advertising partnerships where none exist. In September, TrustSwap announced a “collaboration” with Chainlink which, if read carefully, is nothing more than an announcement that they are using Chainlink’s oracle services. This lack of an actual partnership was later confirmed by Jeff in an interview.

In conclusion, TrustSwap is a cryptocurrency project that should be approached with caution. That said, it does have some merit. It offers a simple product that is easily digestible by the market it is currently trying to attract. If subscription giants like Netflix take the bait and throw some funding their way, the TrustSwap engine might get what it needs to turn the project from a pipe dream into a reality.

Featured Image via Shutterstock & Trustswap

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

Source: https://www.coinbureau.com/review/trustswap-swap/

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