Shadowcoin is part of the Shadow Project - an open source project for online privacy where users can build decentralised apps.
The Shadowcoin network utilises three things to ensure anonymity and privacy for its users: dual-key stealth addresses, traceable ring signatures and non-interactive zero knowledge proofs. With these three features it is the first untraceable and unlinkable cryptocurrency.
The features above make it much more anonymous than its competitors such as Bitcoin or Ethereum. Currently Shadowcoin's closest cryptocurrency competitor is Monero which uses similar concepts to achieve privacy and anonymity in its blockchain.
The cryptocurrency is just one angle for Project Shadow - as an open source project they also encourage developers to create new, private and anonymous services, from P2P filesharing, encrypted messaging and decentralised marketplaces to 'completely new' features.