What is Swipe? (SXP)
The Beginner’s Guide
Unlike other cryptocurrencies, Swipe isn’t just a protocol powered by a distributed network.
Rather, Swipe is both a software and a digital wallet ecosystem that together are designed to allow users to buy and spend cash and crypto assets at physical and digital locations.
The product of a for-profit company, Swipe wallets can be further connected to Visa debit cards and a smartphone application, providing an experience familiar to traditional mobile wallets. This includes custom cardholder perks, such as the ability to receive up to 8% cashback in Bitcoin along with free Spotify accounts.
However, Swipe wallets are enhanced by a host of new features made possible only by the integration of its custom cryptocurrency, SXP.
For instance, Swipe doesn’t charge fees for its debit cards. Instead, users stake SXP tokens to access debit cards with additional perks. The more SXP tokens users lock in special contracts on the Swipe network, the more perks they receive.
By staking a minimum of 30,000 SXP, a user can be upgraded to a special debit card eligible to receive 8% cashback in Bitcoin along with free Netflix and Spotify accounts.
Swipe says it is working on additional services such as a savings account, credit cards and merchant payment processing services. For more regular updates from the Swipe team, you can bookmark the Swipe blog.
Who Created Swipe?
Swipe is a for-profit company founded by Joselito Lizarondo headquartered in London, but with operations in the U.S., Estonia and the Philippines.
Swipe raised roughly $24 million in a series of private and public token sales. Some 60 million SXP were sold in these fundraising exercises, representing 20% of the initial token supply.
In 2020, Swipe was acquired by the cryptocurrency exchange Binance. Swipe’s platform is now used to support Binance Card, a debit card that lets users spend crypto at physical locations.
How Does Swipe Work?
The Swipe network uses the Ethereum blockchain to hold crypto deposits on behalf of users and to grant them various benefits.
However, the platform also runs an off-chain API that allows for compatibility with traditional payments infrastructure, and thus enables features like payments to merchants.
Anyone wishing to utilize Swipe’s features can do so through the Swipe wallet.
The digital wallet application allows users to deposit cash and purchase any of the 30+ cryptocurrencies offered by Swipe directly. Further, the wallet can be used to custody crypto assets as well as to convert one cryptocurrency to another.
Central to Swipe’s ecosystem is the ability for users to use the Swipe card to pay merchants. In this case, smart contracts on the network will automatically convert any cryptocurrency stored in the wallet to the needed cash payment accepted by the merchants at the point of purchase.
Users can manage their card through the wallet application and stake the required amount of SXP to upgrade their card at any time.
Why Does SXP Have Value?
The SXP cryptocurrency is central to maintaining and operating the Swipe network and can be used to pay for various services in the Swipe ecosystem.
First and foremost, SXP is used to pay for transaction fees on the SXP Network. Of note, 80% of this fee is “burned,” or eliminated from circulation, by the smart contracts on the network.
According to the software’s rules, the supply of SXP tokens is limited, meaning that there will only ever be a maximum of 300 million tokens.
That said, the protocol issues over 2 million SXP monthly, with some of these tokens being distributed as staking rewards to users helping operate the network. The remaining supply is issued to the Swipe company and is used to reimburse Swipe’s team and founders.
Due to scheduled reductions in the SXP token supply, the total amount of SXP available is expected to decrease over time until there are only 100 million units left.
Users can stake SXP to access a variety of features within the Swipe ecosystem. By owning and staking SXP, users gain the ability to vote on network rules, such as reward distributions and transaction fees, among other possible changes.
Users can participate in the network’s governance with a minimum deposit of 1,000 SXP, and those who stake over 300,000 SXP can propose changes to the Swipe network.
Those staking SXP also stand to gain a share of 20,000 SXP that are released each day, an amount that can fluctuate based on user votes.
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Why Should I Use SXP?
Swipe may be of interest to investors who believe that the convenience and speed of accessing cryptocurrencies through a debit card and mobile application will gain in popularity.
Clients will also need to purchase SXP based on their interest in any of their debit card tiers, as a certain amount of SXP is required to unlock better rewards.
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