SplashSwap is a decentralized exchange on the Binance Smart Chain (BSC). The exchange rewards users for providing liquidity and yield farming with its native token called ESPLASH (ESPL).
This decentralized exchange has undergone a few domain changes and has even changed the native token. The exchange used to be hosted on SplashSwap.com, but it appears to have moved to SplashList.net. The native token on the exchange also appears to have switched from SPLASH to ESPL.
We find all of this extremely confusing and are unsure about the legitimacy of the project. Just to play it safe, we would avoid approving the smart contract from any of these sites due to the risk of a honeypot smart contract.
With that in mind, this article will offer some insight into SplashSwap, ESPLASH, and the entire decentralized exchange as a whole.
What is SplashSwap or ESPLASH?
Again, we can only find very limited about SplashSwap and ESPLASH. SplashSwap was a decentralized exchange on BSC launched in January 2022. It offered swap pools, yield farming, and liquidity mining.
The exchange did not appear to have much success as we can find no discussion about it anywhere on the internet.
The exchange was originally hosted on a website named SplashSwap.com, but it appears to have changed domains to SplashList.net.
We are unsure what triggered the domain switch. It does appear official as a Twitter account associated with SplashSwap now points users to SplashList.net.
As we mentioned earlier, this is all very confusing and is certainly not a good look for the project.
Why would a decentralized exchange switch domain names one month after launching the exchange?
To make matters even worse it appears that they also switched the name of the token from ESPLASH (ESPL) to SPLASH (SPL).
Again, this does not make any sense. The developers spent all the time marketing a particular token and domain only to switch it a month after launch.
Is SplashSwap a Scam?
We have no idea if SplashSwap is a scam or a real project. We cannot find a whitepaper on SplashList.net, which is a terrible sign.
It also appears that the developers have purchased Twitter followers and paid users to leave comments on their tweets. This is apparent because the tweets have hundreds of replies from random accounts that only say “Done.”
Crypto projects paying for fake engagement on social media means that the project would likely have no engagement without paying for it. Social media engagement is one of the first things that potential investors look into when researching a project, so paying for engagement is an obvious first step for most scams.
To summarize, we have not seen any direct evidence that SplashSwap is a scam. Paying for Twitter comments is very suspicious, though.
If we had to guess, then we would say that SplashSwap is probably a scam that has not received any traction. This is why next to no information from real people can be found about this project anywhere on the internet.
Anonymous developers, the lack of a whitepaper, and fake social media engagement are all major red flags that indicate a scam in our opinion.
How Decentralized Exchanges (DEX) Work?
Decentralized exchanges have become quite popular after the success of Uniswap and then SushiSwap on Ethereum. It is now a soft requirement for every smart contract blockchain to have at least one DEX on it.
How they operate is difficult to understand from a technical perspective, but actually pretty easy to describe.
Basically, a decentralized exchange is nothing more than a token swapping protocol. Users can swap one token for another at a specific ratio determined algorithmically. The swap pool is seeded with an initial ratio of two tokens that determines the price.
From that point on, the price is only determined by the ratio. It does have a tendency to stay fairly close in price to centralized exchanges because arbitrageurs will drive up demand for the token if the price falls too much.
Things get more interesting when you realize how DEXes attract users to lock liquidity into the swap pool. They have a few methods for this. All DEXes utilize something called liquidity tokens, which are tokens given to anyone that locks liquidity in a particular pool. If you lock Ether and Tether in a swap pool on SushiSwap on SushiSwap, then you will receive Sushi LP tokens.
These tokens pay out a small fee collected on every transaction – it’s generally not much money.
However, DEXes have begun offering an investment product called a yield farm. This allows LP token holders to lock LP tokens (and the small fee commission) into the farm and earn a separate yield farm token.
This is generally done by DEXes to increase liquidity on their exchange or by token projects to increase the liquidity in the swap pool.
With that in mind, many DEXes have appeared over the years on all the different blockchains. The DEX of choice on Binance Smart Chain is PancakeSwap. PancakeSwap was started by former Binance employees, so we find it extremely unlikely that the project will rug. It has also been around for years and has gained the trust of the BSC community.
Is SplashSwap a Good Investment?
No, SplashSwap is not a good investment. For one, we cannot even be sure of the proper domain because the project has been very unclear about the difference between SplashSwap and SplashList.
The native token of the exchange has also appeared to change at least once already, which is not a good sign.
The lack of whitepaper, anonymous developers, and unpopularity of the project make it a terrible investment. We also find it extremely unlikely that SplashSwap will be able to compete with PancakeSwap as it offers nothing unique and has no redeeming features about it.
So, that sums it up for all you need to know about SplashSwap. It’s simply a DEX on BSC that does not look too promising. It is highly unlikely that it can compete with PancakeSwap and as such has very little prospects as a sound investment.