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An exotic ERC20 Token you should add to your Watchlist right now!

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There’s probably dozens of new “experimental” ERC20 Tokens being created every month into the Ethereum blockchain. In the past 12 months, we’ve seen all, from ridiculous hyper-deflationary tokens that burn 90% of each transaction, to highly complex stacking mechanisms, most have something in common: they dont stick around for long… Why? Either they lack a fair distribution due to big dev shares, rigged airdrops, passive communities or simply lack of tokenomics that are able to incentivise their long term existence.

But once in a while theres a very few that manage to stick around… SHUFseems to be one of those cases. Let’s explore a few key points first:

Distribution and initial Airdrop
Shuffle Monster (SHUF) was first launched in August 2019 with 1,000,000 tokens minted. Distribution was simple: a 5% Dev Share with the remaining 95% airdroped for free to any ETH wallet that held ETH on a specific block in the past. The maximum airdrop per wallet was 1500 SHUF (if you had 10 ETH in the specified block). This Airdrop system was itself revolutionary as it solved the 2 biggest airdrop problems at same time: Bots and Zombies, bots were completely out of the game, and it guaranteed that every (significant) new holder would be actually someone active and pro-active in the ETH niche but making sure that no whales were born in the (airdrop) process.

SHUF Holders Chart, with biggest account being the Uniswap V2 SHUF Liquidity Pool (Source: Etherscan)

Token Features
The basic mechanic of SHUF is simple: in every SHUF transaction there’s a 2% fee, where 1% gets burned (destroyed forever) and another 1% is “shuffled” and transferred to a lucky holder inside the 512 top holders. This guarantees that the SHUF supply is always decreasing (it’s deflationary) and at the same time it provides a passive earning mechanisms for the top 512 holders (more on tokenomics later). The reward happens on each transaction, so any of the Top 512 holders (the “Heap”) will receive rewards passively without the need to execute any claim transactions.

SHUF Token simple Mechanics: 1% Burn + 1% Reward (source: shufle.monster)

Developer
Unlike most exotic tokens, the developer of SHUF was not some anonymous underground dev, Agustin Aguilar is someone with a name and reputation in the ETH and De-fi circles, he was the lead developer and CTO of RCN (Ripio Credit Network, a leading lending project like Aave or Compound), on his part time he developed projects like Uniswapex (a popular dApp that add limit orders to Uniswap) or Defswap (Uniswap like swapper for DFL tokens) among many other projects.

Community
SHUF can be described as a fully decentralised community driven project, which means that anyone can get involved and develop around SHUF, all from their website, marketing, PR, SHUF dApps and Bot development have all been pushed by the community without the need of an ICO. SHUF’s Telegram has currently 730 members, they are also in Reddit, Twitter and Discord, but most of interaction comes from their Telegram. Their community seems strong with many active members developing around SHUF, their TG includes sophisticated bots that provide realtime stats about everything SHUF related, all from rewards, burning, marketcap, price stats, etc. There are bounties for dApps around the SHUF ecosystem, theres “heap wars” websites, there is a popular Shuffle Raffle dApp that runs every 5 days and was also build by a community member.
The Shuffle community is strong and include a lot of talent within their trenches, there has been a lot of awareness from Reddit a few months ago with plenty of discussion on the token economics and it’s unique heap structure. As a result it attracted many active investors from several de-fi big projects (SHUF is like a “pet” token owned by some big hodlers of projects like LINK, REN, LEND, MANA and UBT), various in-depth analysis have been posted in the past like this one by prominent LINK early investor Timo Harings, SHUF is also regularly covered by popular Crypto Analyst Benjamin Cowen on his Youtube Channel and his SHUF Report, this all shows that SHUF moves a lot of interest among the crypto community, probably because of SHUF unique mechanism of the heap and exotic tokenomics (more on that later).

Some of the many SHUF info Bots created by the Community in their Telegram (source: telegram)

Tokenomics
Two things in play here: Deflation and Rewards.
The burn feature on each transaction makes sure that the circulating supply is always decreasing leading to long term scarcity, like otherwise any deflationary token. This deflation accelerates when there is more transactions, and that has long been a problem for previous deflationary tokens, since most holders just avoid moving their tokens due to the burn, or they trade inside CEX exchanges where there is also no burns.
SHUF has solved this in two ways:
1) SHUF is only available to trade in DEX exchanges, where burn occurs;
2) The Reward System is only available to holders in the “Heap” (top 512 holders), leading to seasonable “Heap wars”, where users fight for a spot on the Heap.

Heap War Example (Source: SHUF Medium)

Heap Wars
Most big holders of SHUF opt to split their SHUF holdings over several wallets, in order to gain more spots inside the “Heap”, and that way maximise their reward probability, which by default is 1/512 on each transaction.
Right now, the Holder #512 has 495 SHUF, that means than any holder that gets more than 495 SHUF will kick #512 out of the “Heap” and claim that spot. Sometimes the heap minimum grows as more holders split their holdings, and that makes other holders to re-arrange their SHUF or to buy more in order to re-claim their spot inside the Heap.
In the past, the Heap minimum has been as high as 850 SHUF during Heap wars events, big spikes in transactions (and price) have occurred while intensive social action also fired. In reality, the Heap minimum moves all the time, not only on price changes because people can maximise ROI by splitting their wallets with a certain strategies, this keeps the activity always running for SHUF, meaning more transactions, more burns, more deflation, less circulating supply, more scarcity.
Overall the Heap War phenomenon is complex and seems to be one of the main attractions by SHUF fans, there is even meme collections about it!


“Heap War” Meme (source: SHUF Telegram)

Price History
After a quick phase of price discovery during it’s launch in August 2019, SHUF attracted many attention among several ETH communities and experienced an intense bull run of several months (with plenty volatility in the middle), culminating in a ferocious Heap War, that extended the move up to $0.55 at it’s ATH. After that, and a second attempt of breaking the ATH, came a predictable sell-off of several months, with SHUF price losing most of the initial run. The chart found it’s base recently, and suddenly out of nothing it experienced a first new explosion in price, followed by another quick correction, this move with the current market environment shows that the interest for exotic tokens like SHUF is far from dead.

SHUF Chart since Inception (Source: CoinStats)

Numbers
From the initial 1,000,000 tokens, there’s only 961,000 circulating SHUF left, due to it’s deflationary feature, that puts it’s current Market cap around $96,000 at the current price of $0.10 per Token. At it’s all time high, SHUF was valued at $500,000 which by this niche standards is nowhere near the potential of a proper speculative move. Tokens with less features, weaker communities and unfair distribution, are achieving market caps of several millions, every other week.
Due to it’s airdrop strategy, and the two big runs and further corrections, most of the big whales and occasional speculators are now out of the scene. SHUF distribution is probably the safest among all it’s peers, theres very few wallets holding more than 1% of the supply while the biggest share it’s still the Uniswap pool which represents less than 10% of the float.

A Unique “Pet” Project
SHUF obviously is no utility token, neither a SOV vehicle, the essence of it’s existence is purely experimental and highly speculative by design. For some it’s a meme token, but for those who really put a valuation into it, SHUF is much more than that, it’s a “pet project”, it’s the kind of coin you want to hold because it’s cool, it has status, and you want to fight the Heap War, while having some fun with it’s tokenomics. That’s why it attracted so many people involved in other ETH projects, the same way Dogecoin attracted a lot of Bitcoin fans back in the day. Even with no purpose, Dogecoin reached a valuation above 1 Billion and it still values in the hundreds of Millions.
Obviously I’m not using DOGE to make a Billion dollar investment case for SHUF or something like that, the point is that we can’t just value a Coin by it’s use case, things have value because people want to own things, and SHUF is valued at $96,000 today.

Veredict
Given the current environment in the ETH space and a probable Alt season of enormous proportions ahead in late 2020 and during all of 2021, I’ve added a small position in SHUF to my long term Hodling projects, I call it my “Buy and Forget” account. I’m not sure how SHUF price will behave in the next months, most likely it will test it’s ATH a couple of times and will be back down a few more, I don’t plan on selling at a specific price, rather I want to hodl it during the alt season because I believe in ridiculous high valuations for a handful of projects, way above their current ATH, and SHUF is certainly one of those projects.

Links:
– Shuffle Monster Official Website
– Shuffle Monster Telegram
Shuffle Monster Medium
– SHUF on Uniswap V2

This post was first published in Medium by Author Edward Wolff

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