Swarm AMA — The Wealth Club
First off all we are thankfull for John from the Swarm team to make some time for us and participating in our AMA. The AMA was hosted in our Telegram channel and was the first of many more.
Let’s jump to the Questions!
The project Swarm is located in the Security-Token-Offering area. According to the PWC report, the expected market size for security tokens in 2030 is $2,000 billion. You serve a large market here. But first in general: Can you briefly explain what exactly Swarm is all about?
Certainly, indeed the market is truly huge for tokenized assets, indeed also the regulatory barriers are starting to reduce so this will create and even bigger opportunity. We are already seeing this in the US and EU has also release some positive guidance.
SWARM is a full decentralized project, governed by its community and an elected council. Swarmnetwork.org. I am one member of this community and one who is also building solutions on top of the open source contracts, as envisioned by the original Swarm team.
Swarm offers anyone the chance to run a regulatory compliant fundraise, simply the ability to do this in a low cost manner with a simple, slick easy to use application, it allows the tokenization of assets on the blockchain, represented by SWARM’s SRC20 security token protocol (on Ethereum but we blockchain wise are agnostic ultimately).
Effectively with a few clicks issuers will be able to create a raise or represent assets and manage these on chain at a fraction of the cost of what it would take to do this off chain. The SRC20 standard developed by Swarm, this is effectively a token standard that meets the requirement and permissioned states needed to create tokenized asset and have them trade on a regulatory secondary market. It will also enable these fundraisers/token issuers the ability to manage these token holders, e.g. distribute dividends or manage the permissions (whitelisting or grey listing for example to ensure the approved wallets are able to transfer/trade these tokens).
We already have provide use case and multiple issued projects on Swarm, this new application gives those issuers and new ones far more functionality and ability to do this in a self-service manner.
What do you mean with the term agnostic? I think, some in here won’t understand this term.
So there are multiple blockchain right? Ethereum, Cardano, Tezos etc.. right now all the building we see and secondary markets are built to serve Ethereum based projects which is what we are building on right now, but should there be demand for other chains or others really gain traction — our protocol is portable to any chain. If there is demand…
So that means, you are not depending on one blockchain, you can offer your service on any blockchain, which is most useful, correct?
Yes true, right now and over recent years, we have not seen any demand for anything other than Ethereum and DeFi is only accelerating this. But if an entity wanted and it made sense — we could offer them the tools to use the chain of their choice, suffice to say we are future proofed in that it is not a huge job to integrate other blockchain, again if there is a need/market opportunity.
Swarm actually started on Stellar and it was pretty apparent relatively quickly that Ethereum was where all the complimentary elements were happening.
No point being sat on your own chain and when it comes to wanting to list assets on some 3rd party exchange you then face large costs. The network effect with Ethereum right now us pretty unstoppable in my opinion but again, we are not here to decided that, the market has and will going forward and we serve same.
As you stated before, Swarm offers to tokenize assets. Are there any limitations in what can be tokenized?
I could tokenize the keyboard I am typing on, and represent that on chain. Pretty much anything can be tokenized and I suspect huge swathes of assets and ultimately value will be.
Fine art, NFT’s, classic cars, equity, bonds, carbon/green certs, sports clubs, you name it, it will be tokenized. The path to that is already started and the ease, transparency and immutability that blockchain provides will make this only snowball. Then the secondary market angle, and ease of releasing value from typically illiquid assets is simply adding incredible potential across the board. This is not even talking about funding or new entities raising capital. simply the assets that can benefit from going digital.
I can see YouTubers tokenize their brand for example, influencers even, things people never even considered and it increases stickiness/loyalty and engagement.
We have had some fairly decent size sport entities for example, and they absolutely see the potential in tokenizing equity for one and fan engagement to open up entirely new opportunities for their fanbase and give them a voice. Post Covid — I certainly see more opening in this area for one revenue sources have been altered entirely.
Maybe I should reach out to my football-club. Or we have a lot of people from the Netherlands, their coffee-shops are famous haha
Absolutely — I spoke with a digital assets consultant on exactly this, to increase their customer loyalty. They are looking to tokenize a small coffee shop chain to really democratize and do something different outside giving out a loyalty card. Why not give them tokenize equity with every cup of coffee. It will come, that is down the line, but I have no doubt even micro transactions in tokenize format will happen in due course.
That was in Netherlands BTW! I hope it comes off, we will see. Regulatory barriers are dropping all the time and EU harmonization on crypto assets is happening to facilitate easier and lower cost tokenization, as currently there is ambiguity and lack of joined up policy across member states. Leading to a not always level playing field and cost.
Lets go back to the beginning of Swarm. I’ve been following the project for almost 2 years. Since then, a lot has happend, including the founding of Swarm Capital. What is it all about and what impact has it had on the project and what will it have in the future?
Yes a lot has happened, actually Swarm is prob the original DeFi project if anyone has background knowledge, we had this tag/term several years ago when nobody was using that or even knew what being decentralized meant.
Like any project coming through the recent bear market, it has been difficult to weather, the entire project moved from a core team to a completely decentralised and fully democratic org, the well is dry for team members and salaries and has been for some time, as it happens I far prefer where we ended up, price excluded, that has been tough on everyone.
Difficult decisions in the past meant to continue development and get to at least a point of functionality, the token price pretty much had to be cannibalised to pay for development.
Factually this is no longer the case and from here it is my desire to put the token and it’s utility on a new a much more central standing, I was not a founding or ever a Swarm team member BTW.
Everything that needs to happen from here will happen because it is what the $SWM token holders both ballot for and vote for, that is how the org functions, truly decentralized and more to happen around this.
Swarm Capital is an offshoot, a private entity building enterprise solutions to serve the same market and positively also building on the open Swarm SRC20 standard. This creates simply another on-ramp for business to Swarm Network.
We want to see more entities building in the space, the tools we are aiming to provide can serve the needs of a wide audience looking to access digital assets and the growing market developing & forecasted
You just said, that you are pushing things forward, although you are not a founding or swarm team member. Why so?
Like many, including yourself I have been following Swarm for many years, since I first bagged my $SWM token! I have been basically following it inside out and working on outreach to prospective issuers for some time. Fundamentally — I have also seen the potential both now and coming and it is armed with this knowledge that I have alongside another strong Swarm community member (remember there is no team, this is a community project, completely decentralised) been personally funding and allocating time and resource to build out the application that meets what we know the issuers require and that effectively fulfills what we need to become sustainable again.
I am doing this because of the opportunity I have seen and expect to see grow for the product and its potential market. it is being built to be a self serve application all built on Swarms open source contracts. Anyone can build on there, same way anyone can build on top of Ethereum, We are simply building on top of Swarm existing open architecture. If more people share that vision, they can collaborate with us, or built complementary products, whatever, open book.
The key is this is a Network of community members and i would rather shape something I know can deliver value and take it to the market than wait for others, but believe me we will take all the help we can get and then some to further advance the Networks goals. Good community people are needed and anyone can run for the council and make their voice and mindset heard.
Let’s talk about the SWM-Token. What are the advantages for someone to own it?
$SWM represents your voice and stake in the Network and its potential, it gives you the chance to vote on key decisions that shape the direction, and of course should we be successful in delivery and utilization these solutions.
Anyone using the applications will need to deposit/purchase Swarm in order to access these service outlined above. So the token holders and Network all benefits from increasing tractions.
This all happens seamlessly BTW (click of a mouse) but it will be powerful for the network, the ingredient after release will be utilization and we have plans in place to stimulate that also. We have a number of parties already lining up to use the app and I am hopeful with some of the changes we are making that we add value almost immediately back into this Network and the token $SWM. But speculation on that is for another day and another group, my goal is to build something of value and the rest takes care of itself.
That means, every project, which wants to use your service, has to buy Swarm tokens off the market?
Well to tokenize an asset right now even with the Swarm. app which is just a pure tokenization app, you would already need to stake Swarm tokens and several already have, these are staked for the duration of the project.
out new application opens up an whole host of features and functionality and we will have some new commercials to increase use case and demand from Swarm, All to come and I will announce that in weeks ahead and how it will work. Suffice to say, it is pretty positive!
I remember, that Siemens Energy used already your service for a pilot project.
Siemens Energy continue to build with Swarm Capital, I don’t think such a fact has really been understood and the current almost test case application has been a success on many fronts.
Energy is an area ripe for tokenization, I know this first hand as I also work in this space for many years.
This use case is powerful demonstration of what is a world leading company seeing the value of what we can be created and no reason the Network cannot attract other entities to ‘come build with us’. That is the vision and we work to make it compelling enough to happen.
Swarm Network will be attracting usage in its own right, and we have already entities wanting the upcoming functionality and ability to easily raise funds on Swarm. All to come, I don’t want to give dates but we are in final testing, date as impossible to keep. But suffice to say we are pretty damn closer to the end line very day to what is a vastly better/improved and more functional application than the current Swarm.app which already allows tokenization but little else.
We are not dead as the current $SWM price would suggest and that is about as much as I can say right now, we need more good community member and people who want a place and voice to shape what we ultimately call SWARM. Don’t be shy come join the group and show what you can do. Swarm needs new council members, the Network can be a platform for good developers and other skills set to promote what they can do.
Why sit at the back when you can drive the car to where YOU want to go. That is what I am doing and I welcome more backseat drivers to stand up!!
Be careful it is a blackhole, you may never leave the SWARM collective :)
Now let’s get to the competitors real quick: There are some well-known names like Polymath ($POLY) or Harbor. What are your differences, what is your unique selling point and what makes you better?
We focus on offering a really fully featured application, decentralised governance and a very low price point to access such tools. Crucially this is a network and even the issuers themselves benefit from its success. The more value being sucked in and staked in $SWM tokens means the higher the price and value of this network, it is in everyone interest to increase adoption of the tools that are powered by Swarm. Network effect. Look at Ethereum for a enormous example of what can happen with adoption.
As it happens Swarm is a tiny fraction of the price of a project like POLY and IMHO we have already achieved far more market traction. The current $SWM token price which is an really all-time low is a result of past difficult and often contentious decisions. We only improve in terms of application functionality from here and at least have a real fighting chance of improving across a number of areas, not least token price. This is key and only people who bought and paid for $SWM with hard earned like myself understand this, which is why I am pushing along development to push value back in, not extract it. We ask for nothing in return, just that people will support and promote what we push out there as a community.
Together we are strong, It would have be FAR easier for me to just take the funds we have allotted personally to get to where we shortly will be, (at least less baggage) and prob gone and built something else, but that is not my goal or what attracted me to Swarm. it is building something that we can all be proud> i won’t stop till the job is done and I am a a concerned as the next person about the token price, which is why we are making it pretty much the heartbeat of our new app.
I also heard, that there a huge upfront costs of using the service of the other competitors. How is it with using swarm?
Absolutely — we have seen costs on several hundred k with competitors like Securitize. when you have raised 50m in VC, you need to make some payback.
Likely all of those well capitalised entities will offer SaaS with big recurring fees. On price we will eat them alive with our network offering. And if we need really big enterprise ready application with people and professional services — we have Swarm Capital to serve same. It is a nice position to be in.
My last question is: What is in the pipeline and what can we expect from Swarm in the future?
A brand new application as alluded. More to come soon — we will do more market and promotions of the new app when we can, we will release in Beta and people can see for themselves.
Now we have some questions asked by our community. The chat was very active so unfortunately John couldn't reply on everyone otherwise he would be on a 48 hours shift haha.
I see on your website you have a masternode program , how many coins if you want to take part in the masternode and what is the block reward for a masternode?
50k swarm per node
Block Rewards
Earn SWM for providing network services
• 10 million initial SWM token reward pool (established 1 September 2018)
• 2.5M initial annual pool, reducing by 25% each year, for 100 years
• Earned continuously, paid monthly to active nodes.
Can you give an overview of $SWM Token tokenomics? Will the design of the token rise and fall with the success of the platform, does it include any scarce paths, such as equity, storage or burning?
Token supply is already relatively constrained, of the 78m circulation 15m are owned by the network for reward and treasury. A further 27% of the supply is already stake against nodes.
More is staked against already completed issuances and you are right — some new initiatives spinning out of the app will only further reduce float. All will be announced fairly soon on that 👍
Liquid democracy /network democracy is a way of enhancing Staking and programing liquidity,
can you explain how such enhancements and programmable liquidity can be done with swarm ?
I mean that is fairly complex terminology for saying it’s decentralised in that the Swarm token holders democratic elect/vote for the Swarm council who represent token holders. Token holders also vote for key decision. Moved to snapshot.page
Search and you will see Swarm there in good company.
What are the recent updates from the new SWARM and what are the achievements of the recent SWARM?
Aside from developing a new app to go to Beta shortly, we’ve not announced anything yet or released anything. This is pending and why I am here and have spoken about many aspects. This app will interact with all the Swarm contracts for fundraising and allow all functionality such as distribution of dividends for example that we have witnessed demand for, from issuers themselves.
At this point, do you think you need CEX like binance to keep $SWM growing? Or is it better to forget those things and focus on other activities?
Not needing them at all really.
Lower volume assets are far more suits to AMM (automated market maker) DeFi exchanges on a bonding curve. So long as they have regulated base they will be perfect for security tokens or utility tokens $SWM is a utility token of course. Binance and the rest are in trouble. Not many are paying their huge listing fee and fake volume requirements from here in. Never mind the trouble coming for them and others from regulators. Check OKEx and Bitmex for preamble on where it’s heading.
Is $SWM a global project or local project? Can anybody anywhere use your project without any restrictions?
Yep anyone anywhere can use this. It is self service tools, it will be up to the issuers to ensure they are compliant with local fundraising and compliance requirements. We give them the tools to enable regulatory compliant fundraising and tokenisation, they should all have their own legals and compliance due dill before running any raise for a start.
DeFi is one of the hottest topics in the current blockchain field. Can you share your opinions about DeFi with us? Do you think DeFi will destroy the existing financial system? What is the method of $SWM in the DeFi field?
I like this question and will respond to say ‘DeFi’ is ripe for the benefits of tokenisation — there is a long way to go before anything of what we involved with is challenging legacy systems, however the potential and path are assured.
Swarm will make projects associated with DeFi take on new elements, e.g. tokenized real worlds assets in DeFi is already building behind the curtains across the digital assets space.
Based on your experience working with so many potential issuers, what would you say are some of the “in demand” features of the soon to be released app that will most likely help accelerate adoption of tokenization, tokenized fund raising, and digital securities/security tokens in general?
Even having the fundraise contracts and a UI to interact. Dividends distribution pro rata to token holders, and ability to interact with things like whitelist/grey list form UI is powerful…
Once again thanks to John and the Swarm team for letting us host the AMA.
