CoinEx Institution: Swipe, Digital Asset Payment Solution Based on Visa Debit Card

CoinEx Institution
The Dark Side
Published in
4 min readMar 12, 2021

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I. Project overview

Swipe is a fiat channel for digital assets where users can trade various digital assets in real-time with fiat money. It is designed to “make digital assets the mainstream through the establishment of fiat channels.” Swipe wallet allows users to transfer, store and withdraw crypto assets. Through Swipe’s Visa debit card, users can consume digital assets in their wallets in the form of fiat money.

SXP, the functional token of Swipe, is mainly used as the transaction fee, trading medium, and vouchers of discounts in transaction fees for users. In the Swipe system, 80% of transaction fees will be publicly burned on the chain.

II. Business Model

2.1 Business model

The Venus protocol was developed by the Swipe wallet, which Binance acquired earlier last year. Venus, a decentralized stablecoin system, is a currency market protocol that aims to introduce a fully decentralized lending system into the Binance Smart Chain (BSC) to enable fast and low-cost transactions. In addition, based on the Binance smart chain, Venus will also mint the decentralized stable currency VAI backed by a basket of BEP-20 tokens. Venus can be taken as a hybrid of MakerDAO and Compound, which attempts to reshape the cross-border financial system and strengthen the financial collaboration in the global supply chain.

2.2 Token economy

1) Token information

Token name: SXP

Token type: ERC-20

Contract address:

0x8ce9137d39326ad0cd6491fb5cc0cba0e089b6a9

2) Token functions and distribution

The Swipe team decided to limit the maximum supply of SXP to 300 million units. However, as the tokens are burned, the total supply will be gradually reduced until it reaches 100 million units.

SXP Distribution Model

As the functional token of Swipe, SXP has five main functions, namely:

① Transaction fee

② Network gas

③ Trading medium

④ Staking certificate

⑤ Voucher for the user to obtain a discount on transaction fees

In the Swipe system, 80% of transaction fees will be publicly burned on the chain.

II. Exchanges Supported

Currently, Swipe is supported by CoinEx, Binance, KuCoin, Bittrex, etc.

III. Team profile

Swipe was established by Joselito Lizarondo in 2018. The team members are experienced in the fields of cryptocurrency and electronic payment. Most of them used to work for well-known international companies such as Binance, VISA, Apple, Samsung, and Google.

Swipe is headquartered in the Philippines and is currently available in 28 countries/regions in the European Economic Area. It supports fiat currency transactions in Euros, British pounds, U.S. dollars, South Korean won, and Philippine pesos.

In July 2020, Binance announced the completion of the acquisition of crypto startup Swipe. In November of the same year, the start-up Fincofex (later renamed SwipeX), which was acquired by Swipe, announced that it had obtained the master membership of UnionPay International and could directly issue debit cards to consumers and businesses. Swipe plans to integrate this function in early 2021 and launch branded UnionPay cards. (Fincofex has previously obtained Swift membership which allows it to process Swift remittances. It is also a major member of MasterCard in the UK and the European Economic Area and can issue debit cards for businesses)

IV. Code Overview

According to the Github open-source code, Swipe currently has 10 main code bases. Among them, code bases of the asset module, Venus protocol module and BSC network module are updated frequently. Overall, the Swipe code base is relatively simple and clear.

Swipe’s open-source code. Source: Github

V. Communities

Twitter

https://twitter.com/SwipeWallet

Telegram

VI. Risk Evaluation

On January 14, 2021, Venus was hit by a major security incident. The Venus development team (i.e. the Swipe development team) has issued a new cross-chain project CANNON (cannon.finance), which sells 80 million CAN to private equity investors for a price of $0.02/unit. These tokens could only be used for mortgage lending but not for sale. Later it sold another 100 million CAN to public investors for the same price. After that, Venus announced its support for CAN as collateral, with a mortgage coefficient of 60%, and the mortgage price was determined to be US$0.35 (17 times the price in the private placement). Shortly after, someone deposited CAN “worth US$150 million” to Venus and borrowed the highly liquid assets on the platform, leaving huge losses to ordinary users. Although the “buyer” has returned the borrowed assets and the Swipe team has also deposited its own 2000 BTC and ETH into the protocol as a relief, this incident has exposed serious loopholes in its risk control mechanism. Fortunately, Venus has already started to follow 100% decentralized governance.

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CoinEx Institution
The Dark Side

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