ShapeShift, a prominent token-swapping platform, has added itself to the long list of crypto companies that have performed a major layoff over the course of the crypto winter. According to CEO Erik Voorhees, ShapeShift has just dismissed thirty-seven of its employees—a third of the company’s workforce.
This may be a sign of decline for ShapeShift, which was once a popular and accessible trading platform. Voorhees, however, believes that ShapeShift can still turn things around.
ShapeShift Has Made Mistakes
In his post, Voorhees laments the fact that ShapeShift made the mistake of expanding drastically before getting hit hard by the recent crypto market downturn. As a result, ShapeShift has become one of many companies that have executed major layoffs. Other companies that have done the same include Bitmain, Huobi, Consensys, and Steemit.
This could indicate that major companies are having severe difficulties due to the poor crypto market. However, Voorhees does not blame the market entirely, and he places some of the blame on ShapeShift itself. Voorhees notes that the company diversified without direction, calling it an overall “lack of focus.”
Over the past year, the company has created a competitor to CoinMarketCap, acquired the hardware wallet manufacturer KeepKey, and bought out a competing token swap called BitFract. It seems that ShapeShift made these expansions and acquisitions in order to dominate segments of the crypto market with little rhyme or reason—leading it to abandon its central appeal.
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A New Direction For ShapeShift
ShapeShift gained much of its original popularity from the fact that it allowed users to swap coins quickly without the nuisance of KYC verification. This ended in September 2018, when ShapeShift introduced registration. It seems that this did not just upset the public; the decision also lost ShapeShift some of its “most valuable API partners,” according to Voorhees.
It is difficult to overstate just how much of ShapeShift’s appeal rested on one feature: no accounts or registration. Although ShapeShift will probably not return to that original model, Voorhees did take the time to criticize centralized exchanges and assert the need for investors to control their own keys:
“I suspect a great many cryptocurrency customers have never held their funds anywhere other than a centralized exchange. This ongoing custodial risk is tragic, and we plan to fix it.”
The post suggests that ShapeShift will introduce a more permissive approach in the near future. Voorhees claims that the “new ShapeShift” will provide a “contribution to self-sovereign finance” and will give users more direct control over their funds.
This doesn’t mean that ShapeShift will stop acting as a centralized trading platform; instead, it will double-down on its non-custodial nature. It is not clear exactly how ShapeShift will change its services, but the platform could offer much more control to investors in the near future.
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