Growing the Swarm Network with Swarm Markets
The Swarm Capital team wants to make sure that we make information available to the community explaining how the Swarm universe will grow with the addition of the newly announced Swarm Markets project as well as to address any concerns community members might have about effects Swarm Markets and its SMT token might have on the Swarm Protocol and SWM.
Closing the distances between the Swarm concept, the ICO, and the latest announcement of the Swarm Markets’ licensed exchange has been a long, sometimes winding road. It’s a lot to follow and we appreciate that not everyone has been able to fully process all the details.
As per commitments in the whitepaper and with the delivery against the original vision on network governance and open tools built for the community, the core team has been transitioning away from the Swarm Network council as a natural evolution furthering community involvement.
By extending the original vision for securities on the blockchain, Swarm Markets will provide a huge boost to the Swarm protocol and we hope it inspires more members of the community to shoot for the moon with big ideas that build on all the hard work that has put us where we are today.
Delivering the promises of the whitepaper
Swarm Networks counts itself among a handful of ICO projects that has delivered on the promises of its whitepaper, releasing and maintaining a revolutionary technology while growing a committed community base which governs Swarm as a truly decentralized protocol. It bears repeating that buying SWM was not an investment in a centralized team. Instead, it was a way of participating in the function of a platform that was deliberately decentralized from the beginning and a utility which over time has been extended well beyond the original purpose as a governance token.
Money accepted during the ICO was spent extending the technology available to the community. The Swarm Network and its governance systems were deployed and put to use just as described. Unlike other projects where token holders have had no way to confirm how money was spent, the use of funds from the Swarm ICO was confirmed by regulatory bodies to have been in compliance with the stipulations in the whitepaper. Our whole community is more secure knowing the ICO was carried out responsibly and SWM has continued to enjoy the utility status, which is so key to the Swarm community.
With no unfinished business, it’s only natural for original team members to move on and hopefully create new projects which increase the value of the original protocol. In fact, the whitepaper made it incumbent upon them to move on in order for Swarm to be truly decentralized.
Roadblocks for Swarm
The Swarm protocol eliminated myriad barriers for issuers and the second iteration of the Swarm web3 app has made it stupid simple even for non-technical users to issue their security tokens or launch their Swarm powered fund raises. Truly a huge step forward to create adoption for this category that still holds large promise.
Yet, a common concern for issuers has been where their tokens could trade and how liquidity would be provided in order to create an adequate market for trading. Issuers have called for this over and over again, questioning why they should issue a security token at all, if its tradability is unclear.
The success of Swarm is dependent on issuers using the protocol, but a lack of liquidity solutions combined with complex and costly structuring of regulated security token issuances has had a chilling effect on adoption. Other industry projects that we had hoped would succeed in clearing the way for Swarm unfortunately did not make it to a state that allowed the common issuer to use them in a viable way, including tzero, OpenFinance, etc.
By listening to Swarm’s target audience, the Swarm Markets team decided to complement and extend the original Swarm vision by filling the missing gap in the industry. This was quite an ambitious undertaking, with no guarantee of success, since it required lots of additional commitments of resources, helping hands, etc.
Some members of the community have interpreted that as an inconvenience — Philipp and Timo recognized an opportunity to create something new which lifts the liquidity roadblock, provides regulatory clarity from a credible jurisdiction, and opens the protocol to more issuers.
Swarm’s vision was a revolutionary idea in 2017, but the entire crypto space and financial markets in general have moved forward since then. If Swarm is to continue its success, then the Swarm universe needs to keep generating ideas that push us forward and remove obstacles — just like Swarm Markets is doing by developing a regulated liquidity platform on top of Swarm Network.
Swarm Markets benefits
Not only does Swarm Markets clear the way for increased adoption of the protocol and of SRC20 tokens, Swarm Markets is driving issuers to use the SWM fee model as a default. This synergy further underscores the value of the protocol and that is something that will continue with the release of some high profile asset tokens currently in the pipeline.
It’s also worth noting that there is no mechanism designed by which Swarm Markets or SMT would negatively impact the value of SWM. The intent is quite the opposite and we see a virtuous cycle of liquidity making more issuances feasible.
The only thing that can do that is lack of issuance volume on the swarm network as well as FUD within the community and FUD can crash any market, crypto or otherwise.
Our shared responsibility to support the protocol
You might have missed it if you didn’t see Philipp’s presentation at the CAC conference on May 31st, but Swarm Network was front and center of the Swarm Markets announcement on Monday — featured on the very first slide of Philipp’s presentation.
This continues the work that Philipp and Timo have done to spread awareness about Swarm Network at events and in the media since 2017. They are some of the most important contributors to the community, but ultimately they are members of the community just like everyone else, and they don’t have more responsibility to expand Swarm Networks than other community members and contributors.
Philipp and Timo have been the biggest cheerleaders of this project, contributing their time and their capital to initiatives spearheaded by other community members like they did supporting Corn and John with MySwarm.app.
The benefits to Swarm Network are clear. Swarm Networks and SMT represent a win-win for SWM holders and for the Swarm protocol. Everyone in the community should engage and support all efforts from other community members that further our mission to make Swarm an essential part of the new financial system.