Why I’m Keeping my Eye on $SMR for Next Bull Season
Hey folks, welcome to my next article where I take a big deep dive into coins/tokens that I identify might have a very big potential upside going into the next bull market. In today’s article I’m going to be talking about $SMR or the Shimmer token, which is the native token for the Shimmer network. This is the first token that I’ve analyzed about that isn’t fully EVM-compatible, but this should all change very soon — a reason for which I’ll get into later is the main point for why I’m keeping an eye out for what happens to $SMR price action in the future.
Before I get into the meat and bones of what the $SMR and the Shimmer Network are, I can’t really build an accurate picture of it without explaining its relevance is to $IOTA.
Let’s dive in shall we?
What is $IOTA?
At the height of the 2017 bull market, IOTA was one of the most highly anticipated platforms as it was building a consensus-algorithmically-designed way to allow the facilitation of frictionless transactions to occur between Internet-of-Thing (IoT) devices. Built as a DAG called “the Tangle,” transactions on IOTA’s network are environmentally-friendly (no miners required), feeless, scalable, and immutable.
In my opinion as promising as the tech appears to be, like many other projects that were a bit too early for its time, IOTA’s use cases haven’t been made fully available (yet) in order to fully explore its maximum potential.
But we’re not here to talk about $IOTA. Let’s talk about Shimmer.
In late September 2021, the IOTA team launched basically a duplicate network called “Shimmer.” Also known as the “staging network of IOTA,” the Shimmer Testnet is where platforms/protocols can be tested until they reach maturity where they then can be ready to be ported over to IOTA’s mainnet.
In other words, the Shimmer network is the playground from where all the DAG’s future innovations will come to fruition. The most exciting part about all this is seeing how many projects are already taking part; to date, I’m counting about 85 different registrants, some of them which are listed below:
One of the things not explicitly listed in this list of projects but which can be found on IOTA’s roadmap is something that was launched and announced recently on March 29th, 2023 — the ShimmerEVM Testnet:
This induction of the ShimmerEVM Testnet is exciting part is that IOTA and its IOTA/Shimmer-related products are now on a path towards becoming EVM-compatible.
Interoperability on Crack
If you’re still scratching your head about why this is important, then you probably don’t know the general relevance of EVM, otherwise known as the Ethereum Virtual Machine. Being EVM-compatible means that IOTA and Shimmer can now be interoperable with all other EVM-compatible chains, including Ethereum, Polygon, Optimism, Arbitrum, Avalanche, Binance Smart Chain, and so on. According to their March 29th announcement:
Considering the importance of ShimmerEVM for the Shimmer and IOTA ecosystems, and the fact that in the near future tokens worth hundreds of millions of dollars will be exchanged, traded, and bridged from other networks to the Shimmer network, we wanted to invest extra time to ensure the security of the network. This is why the refactoring of the codebase, several audits, and countless hours of internal testing were crucial to be confident about the network’s stability and safety.
Once the ShimmerEVM is completed with its testing phase, its final form will be deployed onto the Shimmer Network (not IOTA), essentially making the ShimmerEVM an EVM-compatible L2. A more recent announcement of Shimmer’s partnership with Multichain made on April 5th gives a glimpse about the room for Shimmer’s growth, as its interoperability can access up to “56 supported EVM and non-EVM chains, and more than 2460 integrated projects.”
The icing on the cake? In addition to being EVM-compatible, there are other features that enhance its interoperability which include:
· Multiple programming languages can be run on the same smart contract chain (i.e., Solidity, WASM), meaning that there’s also compatibility with Solana and Cosmos
· All chains via Shimmer’s L1 can move assets via its trustless bridge without fees
· All assets can be called/controlled on on other smart chains
Therefore summing all these up you have: IOTA’s promising tech (feeless transactions) + a $h!t-ton of projects wanting to launch + Multichain/EVM-compatibility. In my book, this setup indicates a significant chance for success. With the right type of market environment, I am super excited about not only about the Shimmer ecosystem, but also its native $SMR token. This leads me into my next section…
What is $SMR?
$SMR (or Shimmer) is the native token of the Shimmer network, which as I mentioned before. The $SMR token was opened up to the public to $MIOTA stakers in late 2021, where after a maximum 90-day period, stakers were able to earn 1 $SMR for every 10 seconds they had $1MIOTA staked:
Personally I held some $IOTA at that time, but unfortunately I wasn’t able to participate in staking because although it’s opened up a bit since then, back in late 2021 many centralized exchanges where you could buy $IOTA (like Crypto.com and Voyager), did not allow US users to be able to transfer them to your firefly wallet in order to stake — they were only allowed people to buy and/or sell.
Tokenomics: According to IOTA’s governance pages, there was approximately 1.45 quadrillion $SMR tokens that were minted during the $IOTA staking process. Even though I wasn’t able to partake, unlike many VC-backed launches that tend to exclude average retailers from pre-launch funding rounds, I really liked how the token launch was conducted because it gave a fair chance for anyone that was invested in IOTA to be able to participate.
As far as my understanding goes, there were initial plans to have $SMR inflationary via staking at around 8% APY, but those plans have now changed, meaning that all the $SMR in existence are the ones currently available now. Therefore similar to $IOTA, $SMR is not stakeable and is not inflationary. That being said, currently only 80% percent is in circulation and that’s because roughly 20% are reserved for the Tangle Ecosystem and the Community DAO:
Although 80% in circulation is still a pretty good spread, you still have to trust the team that the team won’t dump the remaining 20% on you going forward.
Additionally, if you notice the price action that $SMR has seen since inception, there hasn’t been a whole lot of movement:
Of course this is purely speculation, but similar to many other tokens that I was bullish on such as $LQTY, $CAKE, and $OATH — $SMR passes my personal stress test for how well the token has survived so far this bear market.
Where can I get $SMR tokens?
Although the options of where you can buy $IOTA have certainly increased since then, $SMR tokens on the other hand are still relatively difficult to get, especially for US-based users. According to Coinmarketcap, the only exchanges where you can purchase $SMR are either Bitfinex and Bitforex:
I myself have never used Bitforex, but have played around with Bitfinex and know that you need a basic plus KYC that’s not US-based in order to do anything, let alone buy some $SMR tokens.
There’s also another platform where you can make $SMR swaps via Metamask and TanglePay called Soonaverse, but I’m a bit leery of using it yet as it’s unclear to me how deep their liquidity is on their trading pairs:
Soonaverse may be more promising (and safe) because it’s a DEX, but personally for me, unless this data becomes more publicly available, I’d be more keen on using Bitforex or Bitfinex instead.
If you’re not keen on going through an exchange, the team just launched their “Treasure of Shimmer” campaign that’s promising ways to earn a combined total of 1.8 million $SMR tokens, whether it’s through Test & Earn (where you test out different dapps on their testnet) or Play & Earn (where you complete different quests through Zealy):
Like any other airdrop, I don’t imagine that you’ll become a a millionaire especially if a lot of people participate, but still a pretty fun way to get to know the ecosystem as well as earn a free NFT:
Lastly, if you do decide to ape in, following the principles of “If it’s not your keys, it’s not your crypto,” if you go through a CEX, I’d recommend that you move your tokens off whatever centralized exchange you self-custody and move them to your own wallet. You can obtain your own wallet by downloading it directly from the Firefly Shimmer wallet website: https://firefly.iota.org/
Risks, or things that I’m still wary of
$SMR currently has little utility, meaning that the price is mostly speculative— As far as I have gathered, the only current use-case for $SMR is as a ledger storage deposit. Similar to a housing deposit, every user of the the Shimmer Network (L1) needs to have $SMR to serve as collateral in order to store space on Shimmer’s ledger. Notice I use the words “deposit” or “collateral” rather than “rent” because unlike a fee you would pay on any other chain, you technically get your $SMR back once your ouput on the ledger is no longer needed.
In addition, $SMR can technically used for governance voting, but currently (and for some time) there have been no governing proposals to vote on. Via the Shimmer Firefly wallet there have historically been four different proposals that were voted upon in the past, but it doesn’t seem like there’s any active now:
That means right now because most of the $SMR are already in circulation and only being used as collateral (if used at all), the main $SMR token price movements that are happening are from traders (like me) that are speculating on price.
All this being said, from my conversations with the team, once ShimmerEVM goes out of testnet and runs live, the $SMR token will be used for all fees in its connection with all smart contract-chains. In other words, similar to using $ETH to run transactions on Ethereum Mainnet, $SMR will consequently be used as the utility token when something transacts with its L2.
Low marketcap means high volatility — According to Coinmarketcap, currently $SMR has a marketcap ranking of barely 3000, meaning that this is a very low marketcap coin. As I mentioned before, price action has most likely remained relatively consistent due to its non-inflationary nature and it’s likely that if they were going to, that many people have already dumped their initial airdrops several months ago. But with such a low marketcap, I would imagine that if $SMR starts being picked up, that we’re going to see an extremely bumpy ride going forward.
20% of tokens are still not in circulation — If you’ve read my previous article on FDV, you would have probably noticed that there’s roughly a 20% difference in $SMR’s total marketcap and its FDV. As I mentioned before, this is because 20% of the total supply was not minted during the IOTA staking period and has been instead reserved for the DAO and the Tangle ecosystem. As we’ve seen with the recent shenanigan's of the $ARB token, I think it is healthy to consider that it’s always a possibility that the remaining 20% may be used to dump on retailers.
Conclusion
Given the fervor of the IOTA crowd and how they may be getting tapped into the EVM-world soon, I’m extremely excited about the future possibilities that the Shimmer Network may offer going forward. All that being said, this is once again purely my speculation and hopium-driven research of going to the moon. Similar projects in the past (such as Near’s step towards EVM compatability via Aurora) prove that no one can truly predict price, least of all me.
Thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!
This is my fifth article writing about a particular token/coin that I’ve been keeping my eye on, so if you’re interested in reading about what other coins or tokens I’ve been looking at or why I’m looking at them in the first place, I recommend that you check out my recent articles on $CAKE, $OATH, $LQTY, and $VELO — all which have experienced some pretty good runs over the last few months.
Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!
