Swipe (SXP) Review: Crypto Debit Cards meet DeFi
Swipe is the new kid on the crypto block. Barely 1 years old, the multi-asset cryptocurrency ecosystem has seen a pace of development which might be unmatched in the crypto space.
In its first few months of operation it secured partnerships with the likes of Coinbase and Binance. The latter officially purchased Swipe in June of this year to power its cryptocurrency debit cards.
In just the last 2 months, Swipe’s SXP token has seen a nearly 10x appreciation in price. This came after the company announced they will be dipping their toes into DeFi by introducing a suite of applications and protocols which will be governed by the SXP token. Factor in a recent AMA suggesting that Swipe is playing with the idea of becoming a fully licensed bank and you have a recipe for one hell of a moonshot!
What is Swipe?
Swipe is a company which offers a host of cryptocurrency related services including a multi-currency wallet, cryptocurrency debit cards, cryptocurrency payment solutions for merchants, cryptocurrency borrowing, cryptocurrency savings, and custom cryptocurrency debit card issuance.
Although the company is registered in London, England, its head office and team are located in Taguig, an urban district of Manila, Philippines. Swipe has also been working to develop the Swipe Network, an ecosystem of DeFi protocols (more on this later).
The Swipe cryptocurrency wallet supports over 30 cryptocurrencies and fiat currencies. It is a centralized wallet which has its funds secured by Binance’s SAFU fund and 200 million USD or insurance from Coinbase Custody (100m USD) and BitGo (100m USD).
Most funds are kept in cold storage at any given time. Users can swap seamlessly between assets in the app and can also purchase them directly using a debit card, credit card, or wire transfer.
Swipe Crypto Debit Cards
Unlike most other cryptocurrency debit cards, Swipe cryptocurrency Visa Debit cards let you purchase using cryptocurrency directly (without manual conversion). There are 4 tiers of debit card: Saffron, Sky, Steel, and Slate.
All except the Saffron card require you to stake Swipe’s SXP token to receive the progressively more lucrative rewards which include 100% rebates for Spotify, Netflix, Hulu, Amazon Prime, and Apple Music, and 10% discounts at Travala, Starbucks, Airbnb, and Uber.
One of the selling points of Swipe’s cryptocurrency debit cards is the cashback rewards which are as high as 5% and are paid in Bitcoin. All cards also offer contactless (NFC) payments, ATM withdrawals, and lucrative referral rewards of up to 3000$USD. You are even able to use a digital version of the debit card with just your phone and can use the digital Swipe card everywhere that Google Pay and Apple Pay are accepted.
Swipe Pay allows merchants to receive cryptocurrency payments. Merchants can also choose to have cryptocurrency payments automatically converted into 1 of over 20 fiat currencies offered by Swipe.
No credit checks are required, and Swipe Pay is available in over 180 countries (but not the United States or the Philippines).
Swipe Credit is a centralized cryptocurrency lending platform. Similarly, to decentralized cryptocurrency lending protocols such as Compound, Swipe Credit requires you to overcollateralize your loans.
In other words, you can only withdraw 50% of the USD value of the cryptocurrency you have locked as collateral. Interest rates on loans start at 6% per year. Cryptocurrencies available for borrowing include USDT, PAX, BTC, ETH, DAI, XRP, SXP, EOS, USDC, LTC, and BCH.
Swipe Savings lets users deposit the any of the 12 cryptocurrencies mentioned above in exchange for annual percentage yields (APY) of up to 14%. Assets can either be unlocked or locked and the longer you lock your funds in Swipe Savings, the higher the APY. The SXP staked to acquire Swipe’s more prestigious Visa Debit cards are automatically locked into Swipe Savings and accrue interested while locked.
Swipe Issuing allows third parties to create physical and digital cryptocurrency debit cards with zero hassle. Swipe does all the heavy lifting in terms of regulations, compliance, and network demands in exchange for a setup fee, issuance fee, and a small cut of transaction fees.
Cards are customizable in both design and features. Fun fact: Binance uses Swipe Issuing for their Binance Debit Card.
What is SXP Cryptocurrency?
SXP is a cryptocurrency built on the Ethereum blockchain as an ERC-20 token. It is used to pay for fees for the various products within the Swipe ecosystem. SXP is required to attain the more prestigious tiers of Swipe debit cards and can also be used for payments made with Swipe debit cards.
Once the Swipe Network is launched, SXP will be used to govern of the various protocols within its DeFi ecosystem and be used for staking to enhance network security.
The total supply of SXP is 300 million. When SXP is used to pay for fees within the Swipe ecosystem, 80% of the SXP used to pay for those fees is burned by a smart contract. This makes SXP a deflationary cryptocurrency.
However, it has “deflation limit” of 100 million, at which point new tokens will be minted only to provide rewards to certain participants in the ecosystem (e.g. stakers). 1 SXP token is required to gain access to Swipe’s various products including DeFi protocols on the Swipe Network.
Swipe Token ICO
There were two initial coin offerings of Swipe’s SXP tokens. The first was a private sale which took place on August 1st, 2019 and saw just over 19.5 million SXP sold at a price of 0.20$USD for a total of just over 3.9 million USD. The second was a public sale which took place on August 2-9, 2019 and saw just over 40.4 million SXP also sold at a price of 0.20$USD for a total of just over 8 million USD.
Of the remaining 240 million SXP tokens, 20% (60 million) were allocated for the Swipe team, 40% (120 million) were allocated to reserves, and 20% (60 million) were allocated for the founders of the project.
These remaining tokens have been time-locked in a smart contracts which will see 600 000 SXP tokens released per month to the Swipe team, 1.2 million SXP tokens released monthly to reserves for ecosystem growth (staking rewards, airdrops etc.) and 10 million tokens released on an annual basis to the founders. All tokens will be in circulation by August 2028.
The Swipe Network
The Swipe Network is an ecosystem of DeFi applications and protocols which is currently in development. These include Swipe Swap, Swipe Finance (SwipeFi), Swipe Staking, and Swipe Governance. SXP cryptocurrency holders will have governance over all Dapps on the Swipe Network.
All DeFi products on the Swipe Network will also be available on the Binance blockchain, and users will be able to swap between ERC-20 SXP tokens and BEP2 (Binance Chain) SXP tokens without fees.
Users will have the option to provide liquidity to the protocol by depositing their Ethereum or Binance Chain tokens. In return, they will receive a portion of the 0.3% trading fees on the protocol.
Swipe Finance (or SwipeFi) is a decentralized lending protocol similar to Compound. It will allow users to lend and borrow half a dozen Ethereum and Binance chain-based cryptocurrencies including BUSD, BNB, DAI, ETH, USDT, and USDC. Like Compound, it will feature a dynamic APY on deposited assets and loans. Lenders will be able to withdraw their cryptocurrency at any time and borrowers will have no time limits on when they must pay back their loans.
Swipe Staking will allow SXP holders to stake their Ethereum or Binance chain-based SXP tokens to secure the Swipe network. 20 000 SXP will be distributed daily from SXP reserves to stakers over the 4-year period it will take for all allocated tokens to be issued.
After all SXP tokens in reserves have been distributed, stakers will “earn transaction fees on the network”. Stakers will also be able to vote using their staked SXP tokens. Staking will be available on the Swipe wallet and via the Ledger hardware wallet.
The Swipe Governance platform will allow SXP holders to table proposals and vote for proposed changes to any of the protocols on the Swipe Network. 300 000 SXP tokens will be required to table a proposal, and 1 SXP token will be equal to 1 vote for or against the proposal.
SXP token holders will able to vote for changes to elements such as: adding tokens to SwipeFi and Swipe Swap, changing interest rates in SwipeFi, changing the burn rate of SXP, and modifying the trading and transaction fees on the Swipe Network. It is not known whether users will receive rewards for voting.
SXP Token Price Analysis
The SXP token has quite a remarkable price history. It entered the markets almost exactly one year ago in August of 2019 slightly over its ICO price of 0.20$USD. Over the following months it saw two rallies (October 2019 and February 2020) where it pierced 2$USD, and two pull backs (November 2019 and March 2020) where the price of SXP plummeted down to 0.90$USD and less than 0.17$USD, respectively.
SXP began to rally in July, a few weeks after Binance acquired Swipe in June. Since then, SXP has seen parabolic growth, reaching a high of just over 5$USD just 2 weeks ago.
This may have been caused by the release of their revised “whitepaper” which details how SXP will be used within Swipe’s DeFi ecosystem, the Swipe Network. Although SXP has cooled off to around 3$USD, more growth may be around the corner once Swipe Network protocols such as SwipeFi go live (not financial advice!).
Swipe SXP Exchange Support
If you are looking to get your hands on Swipe’s SXP cryptocurrency tokens, your best bet will be to go through Binance. Over 60% of SXP trading is happening on Binance but there is also a decent amount of amount of trading volume on Bittrex and KuCoin. As mentioned previously, you should also be able to purchase the SXP token directly using your credit card, debit card, or with bank transfer through the Swipe mobile app.
One quick thing to note is SXP’s impressive 24-hour volume, which is more than its current market cap! This is quite incredible as it is rare to see such a large amount of trading volume for a cryptocurrency with a smaller market cap.
Also, if you look closely at the total supply of SXP, it appears that just over 30 000 SXP tokens have been burned to pay for fees. This suggests that people are also using the token and not just trading it.
Swipe SXP Wallet Support
Since SXP is an ERC-20 token, it can be stored on just about any wallet which supports Ethereum. The most intuitive wallet to choose would be Swipe’s mobile wallet. However, recall that the Swipe wallet is centralized.
This means that the funds you store there do not technically belong to you. Not your keys – not your crypto! It does help that these funds are protected by the likes of Binance and Coinbase, though.
With that warning out of the way, you have no shortage of alternatives when it comes to storing your SXP. If you prefer mobile cryptocurrency wallets you can use the Trust Wallet, Coinomi wallet, Exodus Wallet, or Atomic Wallet. The latter two also offer desktop wallets.
Hardware wallet options for SXP cryptocurrency include Ledger, Trezor, and Keepkey. Remember that SXP will soon be available as a BEP2 (Binance chain) token as well. When that happens, make sure you are transferring your SXP to the right network! Sending BEP2 SXP to an Ethereum address will make you lose your SXP!
Although Swipe has only been around for just over a year, its list of accomplishments is quite remarkable. All of these are listed on their Medium page and most of them have occurred just over the past few months.
These include launching the Swipe Wallet just 1 month after Swipe launched, integrating Apple Pay, Google Pay, and Samsung Pay, being purchased by Binance, partnering with Chainlink and Elrond, and launching their staking testnet.
Swipe’s future milestones are fairly generic. These include expanding their services into other regions, notably Southeast Asia, North America, Latin America, and Africa. They also plan to make the upcoming DeFi applications on the Swipe Network accessible via their mobile app.
In a recent AMA, COO John Khenneth noted that exact dates will not be provided for when Swipe expects to achieve these future goals. As such, no dates have been set for when the launch of the Swipe Network.
Why we Swipe Right on Swipe
In what may be a first for cryptocurrency, Swipe has successively delivered functioning products to its consumer base. Whether it is the Swipe Wallet or Swipe’s cryptocurrency debit cards, it seems that you are guaranteed to get a reliable product so long as it has the company’s name and logo attached to it.
It seems Swipe has done everything right, and this is precisely why Binance CEO Changpeng Zhao purchased Swipe (that and because Binance was having issues developing their own crypto debit cards).
This begs the question: how on Earth is this possible? How can such a small company launch such a large ICO of their token, partner with some of the biggest names in cryptocurrency, and then be purchased by the largest cryptocurrency exchange in the world within a single year? Either Swipe has a superhuman team (which does not appear to be the case) or there is something more going on than meets the eye.
While we could speculate ourselves down one of many rabbit holes, there really seem to be one possibility here: there was big money and big names behind the project before it started. This is where things start getting weird.
For starters, there is no mention of venture capital investment or partnerships prior to the project’s launch anywhere in their documentation. It may be the workings of Swipe’s CEO, Joselito Lizarondo, who was apparently an early adopter and miner of Bitcoin.
This brings us to a concerning observation: a relative lack of information. Yes, Swipe has a Github, but only for their API; their core operations are not open source. The only 2 YouTube videos on the Swipe YouTube channel have the comments turned off, only one of these videos features a member of the Swipe team who is clearly reading off a script, the few Medium posts they have made are quite short and lack detail, and their “whitepaper” is really just a product manual which does not explain any of the technical elements of the project.
Were it not for its notable partnerships, functioning products, and transparency when it comes to the SXP token’s distribution and emission, Swipe would quickly be considered a scam and its SXP token slapped with the label of shitcoin.
It is also interesting to note that Swipe conveniently allows Binance to experiment with DeFi protocols and cryptocurrency debit card with reduced accountability should something go wrong.
Even though Swipe’s backend seems to be missing, its front end is unquestionably spectacular (and functional!). Swipe’s acquisition by Binance, although potentially concerning to some, will no doubt go a long way in helping Swipe actualize its DeFi dreams with the Swipe Network.
With the SXP token soon to be used for governance over these powerful protocols and the key which quite literally turns Swipe’s various products and applications, both Swipe and the SXP token have a very, very promising future.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.