Swarm is a non-profit foundation dedicated to building an open infrastructure for the new, emerging digital securities economy. Our efforts are focused around building tools to support the digitization of assets or other things of value, to ensure compliance mechanisms are established, and to make the interfaces and infrastructure for doing so accessible and open to all. We also aim to reduce friction and lower barriers with regard to access to financial opportunities in a global perspective. We approach this from both a technology perspective as well as taking an active interest in helping to drive standards to establish a reliable framework for the industry to grow.
Swarm solves the problem of the lack of liquidity present in traditional asset ownership, allowing for fractional ownership opportunities of any asset. Tokenization creates opportunities for asset owners to realize capital from new sources, and for individuals and institutions to invest in, own and govern previously unattainable assets. Additionally, Swarm is addressing the compliance element through its MAP solution, which is vital to industry development across jurisdictions to realize broader, easier participation alongside improved liquidity.
Swarm is producing a suite of tools and infrastructure components to help create a thriving digital securities ecosystem. Our efforts fall into 3 primary pillars: Tokenization, Compliance, and Governance. Inside each of these areas, we’ve developed and continue to iterate on tools that allow individuals, businesses, and the blockchain industry to both participate in and build upon.
Swarm’s open-source toolkit is technology agnostic and supports:
creation and issuance of tokens as digital assets
token compliance with securities regulation in any jurisdiction
token sales for cryptocurrency and fiat
token transfer rules and restrictions
inheritable investor qualification
tools for token management and governance
No, but we do partner with credible legal advisors and marketing agencies to meet the needs of token issuers using our technology.
Yes, SWM is the Swarm utility token.
SWM is used to establish stake-weighted voting rights on issues regarding the activities and regulations of the Swarm Foundation, a non-profit organization which administers the SWM token.
SWM is staked by token issuers against SRC20 token Digital Security Offerings issued through the Swarm infrastructure. The stake amount is determined as a % of the funds raised or of the asset value.
SWM is staked by Masternode operators who wish to build and support Swarm’s decentralized infrastructure. .
SWM is used to pay rewards to token issuers and masternode operators who are staking the token.
For the duration of 2018, the Swarm blockchain was built on a custom fork of Stellar. Swarm has since extended the Swarm Protocol into other chains, starting with Ethereum. The infrastructure has now become blockchain agnostic. This means Swarm will support issuance on any blockchain that supports multi-signature transactions.
Swarm's invest beta platform was launched in January 2018 and can be found here: https://invest.swarm.fund.
In 2019, Swarm released open infrastructure that provides a complete set of tools to support token issuers, found at https://swarm.app. This includes Tokenization, Fundraising, Compliance and Governance APIs which will be free to use. Initially they will support ERC20 and Swarm SRC20 issuances.
In 2020, The Swarm Network ecosystem continues to be very active with developers working on the suite of open source smart contracts. Soon there will be new a release with more features.
The current iteration of Swarm was started in 2017. It is independent and disconnected from earlier iterations, the very first of which was referred to as a “crypto equity” platform in 2014.
There are no issuance, listing, management or any ongoing fees charged by Swarm. The only requirement is that after successfully raising funds, you stake an amount of SWM tokens - in the range of 0.3-1.0% of assets under administration raised. These are staked for duration of the security tokens existing. When these are burned, redeemed or otherwise returned, the stake is fully returned to the issuer. By eliminating upfront fees, we are making it easier for you to focus your budgets on legal, marketing, and the other costs necessary to bring a security token to market. We’re also making it easier for service providers to offer value on top of Swarm’s open infrastructure.
Using our infrastructure is free. The only requirement is that you would be required to stake an amount of SWM tokens which is a proportion of the funds you raise. This stake is only required after fundraising and triggers the release of funds to you and the release of tokens to investors. The stake itself is locked for the life of the investment opportunity. Separately to this, you would need to account for a budget to handle legal, marketing and other costs. However, our infrastructure is free to use.
Swarm has developed a regulatory compliant framework that facilitates the digitization of assets and investment opportunities. In order to automate, manage, and simplify the transactions and agreements between parties, Market Access Protocol is built to function as a compliance layer which allows for the transfer of digital value and shared ownership of assets to be more easily realized.
Market Access protocol (MAP) is Swarm’s investor compliance ecosystem, built and maintained by a decentralized network of nodes. It is a protocol that defines how applications (blockchain or non-blockchain) interact with people in a regulatory compliant manner, and results in a distributed ledger that stores investor qualification data, respecting user privacy.
Compliance requirements are referenced in the token contract as well as the KYA (Know Your Asset) details, and are checked by MAP for every transfer of tokens. MAP is also aware of wallet certifications and only wallets that meet these requirements are able to participate in a token sale or buy tokens in secondary markets.
SRC-20 is a standard that extends Ethereum’s ERC20 fundamental token standard to support regulatory compliant transfers. Tokens that support the SRC-20 standard can represent fractional ownership in assets and are often termed security tokens or digital securities.
The SRC-20 standard allows token issuers to define the rules and restrictions that must be satisfied in order to facilitate a regulatory compliant transaction. Rules include checking for investor compliance (specific to applicable jurisdictions), ensuring cap table and holding limits are enforced, provisions for a right of first refusal, time-based restrictions, and any other programmable rule that can be processed by a smart contract.
SRC20 security tokens: 1. represent ownership of part of an object or “asset”, 2. allow holders to manage that asset through voting, 3. secure a right to any revenue streams from the asset, 4. are tradable in a regulatory compliant manner.
SRC20 token contracts extend ERC20 in that they have a few extra features:
Ability to have an owner (usually token issuer).
Ability for the owner to freeze transactions, mint more tokens or destroy tokens.
Require an authority to allow for token transfers after it checks for transfer restrictions.
Holds token fundamentals which is an IPFS document reference containing all token relevant data.
First and foremost, Swarm is not a principal and is a technology & tools provider to support the token issuers in their needs. It is the token issuer's responsibility to know and abide to regulations in the specific jurisdiction they want to operate. After understanding the regulatory requirements, the token issuer sets those requirements in the token contract.
Using Swarm’s Market Access Protocol tool, token issuers are able to connect with any 3rd-party qualification service providers and make their investor pools available for KYC/AML and other verifications.
Swarm does work directly with different financial regulators in different jurisdictions to both build compliance with current legislation, and help influence the direction of upcoming amendments and new regulations. We are using this research in building the tools to enable token issuers to configure their compliance needs using our tokenization infrastructure, and then enforce it using our compliance tools.
We have several counselors and other legal partners in different jurisdictions. We have partnerships with various STO consultants that can provide legal services in specific jurisdictions.