06 Oct What is Shimmer (SMR)?
To understand the Shimmer Network, it is first necessary to know a little about IOTA. IOTA is a distributed ledger and token that was initially designed for the Internet Of Things to facilitate feeless, low resource-consuming, machine-to-machine microtransactions.
IOTA debuted with a crowd sale in 2015, and is not based on a traditional blockchain. Instead, it uses a DAG known as the Tangle. DAG is an acronym for Directed Acyclic Graph, which is a data structure that offers multiple advantages over traditional blockchains. Most notably is the ability to facilitate transactions in parallel instead of relying on predefined block intervals with limited blockspace like in blockchains. Combined with a principle of users having to validate previous transactions when issuing their own, energy-intensive mining becomes unnecessary, which enables feeless transactions.
The Shimmer Network launched on September 28th, 2022 as a staging network for IOTA, launching with IOTA’s so-called Stardust Tokenisation Framework Protocol Upgrade. Stardust turns the Shimmer Network into a Tangle-based multi-asset ledger, allowing anyone to feelessly mint their own, custom native tokens and NFTs. Users and smart contract chains anchored to Shimmer will thereby be enabled to mint, manage, wrap and unwrap assets and feelessly transact with other smart contract chains also anchored to Shimmer.
Shimmer thereby is a Layer 1 innovation network, turned into a parallelized multi-chain settlement layer for EVM and Wasm-based smart contract chains. It was created to lay the groundwork for the growth of digital assets and highly customizable, interoperable token economies.
Shimmer network (SMR)
The Shimmer Network is a staging network for IOTA’s mainnet. It allows fast paced, rapid innovations and EVM or Wasm-based smart contracts to be battle-tested under real-world conditions. It allows deployment of IOTA’s Layer 2 smart contracts and smart contract chains, DApps, and Web3 capabilities in an adversarial environment before they are implemented in the IOTA mainnet.
Shimmer is a fully-functioning network in its own regard. Its multi-asset ledger facilitates transactions of native and custom tokens and NFTs, which inherit the same security guarantees, feeless properties and scalable qualities of the native assets, provided by the Tangle.
How Shimmer Works
Shimmer’s compatibility with the Stardust Tokenisation Framework will enable a horizontally scalable and modular multi-chain architecture that allows the processing of sovereign smart contract networks in parallel, while retaining composability across chains.
Since Shimmer’s DAG base layer is feeless, and native tokens and NFTs will inherit these same qualities and security features, this means every additional asset on Shimmer’s multi-asset ledger will also be feeless and scalable.
Shimmer’s DAG is UTXO-based (Unspent Transaction Output -based) and able to scale to higher transaction throughput with fast finality times (5 seconds). This allows it to be a more viable option than standard L1 blockchains for businesses that require high transaction volumes.
The UTXO model for native tokens on Shimmer has also been expanded to allow new levels of transaction features, such as unlock and timelock conditions, and to take advantage of Token Foundries. Token Foundries allow anyone to mint, manage, melt, or burn custom Layer 1 tokens and NFTs.
All tokens produced by Token Foundries are separate assets, and Shimmer’s multi-asset ledger tracks ownership of each one. Minting such native tokens is feeless, only requiring a minuscule, fully refundable deposit in SMR that is only locked as long as an asset exists.
Because Shimmer’s Token Foundries mint native Layer 1 tokens and NFTs with the same security characteristics as Shimmer’s SMR token, they are substantially safer than tokens created by a potentially exploitable smart contract in a Layer 2 network.
NFTs on Shimmer also have unique qualities. Apart from not requiring fees for minting NFTs or trading them, NFTs can also act as wallets themselves, able to receive and hold other NFTs and tokens, allowing for exciting new use cases for NFTs in Web3 applications.
The Shimmer native assets framework allows for sovereign smart contract chains to wrap any L2 assets into a newly minted token on the Layer 1 Shimmer network. This wrapped token can then be transferred to another address on a different smart contract chain.
The value of one smart contract can thereby be transferred to another smart contract, which allows for trade between multiple chains without the need to build, audit, or maintain any bridges. Additionally, there are no fees associated with minting or transferring, so the operational cost is very low.
After the Stardust tokenization framework has been tested and proven on the Shimmer Network, the IOTA network will upgrade to Stardust, paving the way for a multi-chain smart contract architecture on top of IOTA’s base chain.
Why is Shimmer Unique
As a multi-asset ledger, Shimmer will be able to keep track of the ownership of multiple assets, unlike conventional Proof of Work (PoW) or Proof of Stake (PoS) stake-based blockchains which only track ownership for a single digital asset.
Shimmer is not the first distributed ledger that has the capability to deploy multiple smart contract chains on top of the base layer, but on other platforms, these chains suffer from fractionalisation, which means they exist as data silos which can’t interact with each other.
On other distributed ledgers, one network is not compatible with another, so to counter this, dedicated cross-chain bridges are created to let them interact with each other. These bridges have certain flaws and drawbacks, however.
- Every individual bridge between chains needs to be coded, implemented, secured and maintained. If you want to interact with ten chains, you’ll need to build and maintain ten bridges. This is very expensive and requires a lot of effort and commitment.
- For assets to be transferred between chains, bridges must maintain large amounts of liquidity, making them high-value targets for cybercriminals and hackers. Many bridges have suffered devastating attacks and lost billions in user funds.
- Bridges are run as for profit services, resulting in fees, which can be prohibitively high and quickly add up as transactions may take place across multiple chains and bridges.
Shimmer Network mitigates these issues by allowing Layer 2 assets to be wrapped in Layer 1 native assets anchored in the base chain. They inherit the feeless properties of the base Shimmer Network Tangle and are able to seamlessly interact using Layer 1 as a trustless, feeless, and secure cross-chain bridge.
What is the Shimmer Ecosystem
Shimmer is an open, permissionless network; therefore, the Shimmer Network ecosystem is composed of a diverse mix of so far 70 DeFi and NFT platforms, DEXs, DAOs, and infrastructure projects.
The full list of projects in the Shimmer ecosystem can be found here. Since anyone can mint and create native tokens and NFTs, it’s anticipated that the Shimmer Network ecosystem will experience intense growth.
The Shimmer Network is the vitally important first step in the complete decentralisation of the IOTA network and which will be implemented in stages that will ultimately result in the much anticipated “Coordicide”.
IOTA’s Coordinator is a special node operated by the IOTA Foundation, which safeguards the Tangle from early-stage attacks, but has the drawback of limiting the network’s scalability and decentralisation.
The Coordinator will remain in place until the network’s development has matured to the point that it can become fully decentralised, and the Coordinator is removed. Shimmer is the crucial beginning milestone enabling the battle-testing of a completely new consensus mechanism on a feeless DAG allowing for full decentralisation.
What is Shimmer Token (SMR)
The SMR token is the native token of the Shimmer network. It is the asset that any connected smart contract chain automatically has access to and, as such, represents the base currency of the whole multi-chain architecture. The SMR token can be used to settle execution fees on smart contract chains, as is the case in the upcoming ShimmerEVM chain. Also, the $SMR token is used in storage deposits when minting native assets or NFTs on the Shimmer network.
SMR Tokenomics and Supply
The Shimmer Network, as an outgrowth of the IOTA project, shares many of the same team members, as the Stardust Tokenization Framework upgrade is central to both the Shimmer and IOTA network roadmaps. Shimmer Network’s role as an innovation layer for IOTA and its eventual upgrade to the Stardust Tokenization Framework means there is a high degree of overlap in both teams. You can find more info about the team behind Shimmer Network here.
Leading members of the Shimmer Network team include:
- Dominik Schiener — Co-founder of IOTA and Chairman of the IOTA Foundation
- Dr. Navin Ramachandran — Member Board of Directors
Through the Shimmer Touchpoint Open Builders Program, several partnerships have been announced by projects looking to build first on the Shimmer Network and later on IOTA. Touchpoint is a builders program, offering a collection of hands-on resources, connections, grants, funding and advice for developers helping developers to build, launch and scale the next generation of DApps and infrastructure.
How to buy SMR on Bitfinex
How to buy SMR with crypto
2. Go to the Deposit page.
3. In the Cryptocurrencies section, choose the crypto you plan to buy SMR with and generate a deposit address on the Exchange wallet.
4. Send the crypto to the generated deposit address.
5. Once the funds arrive in your wallet, you can trade them for SMR. Learn how to trade on Bitfinex here.
How to buy SMR with fiat
2. You need to get full verification to be able to deposit fiat to your Bitfinex account. Learn about different verification levels here.
4. Check your Bitfinex registered email for the wire details.
5. Send the funds.
6. Once the funds arrive in your wallet, you can use them to buy SMR.
Also, we have Bitfinex on mobile, so you can easily buy SMR currency while on-the-go.