Swarm brings tradable stocks and bonds to decentralised finance (DeFi) with tokenised Apple, Tesla and US Treasury bonds.
DeFi platform Swarm is launching a public investment offering of tokenised bond exchange-traded funds (ETFs).
The offering sees the integration of stock and bond certificate tokens with traditional financial markets and will allow investors and hedge funds to redeem the token value against the value of the underlying real-world asset.
In this way, tokenised bond ETFs offer investors cost-effective access to liquidity with the benefit of traditional market stability and the transparency of the blockchain.
As a result, Swarm’s retail and institutional users can access tokens on the Polygon blockchain, with tokens custodised by battle-tested code. These tokens require no minimum investment and investors can choose to add them to liquidity pools to earn yield or retain them in web3 wallets.
For investors already on-chain, including stablecoin issuers and treasury managers, Swarm’s latest announcement allows them to deploy into less volatile assets without leaving the DeFi ecosystem.
A first for DeFi
Reflecting on the launch, Swarm co-founder, Timo Lehes, recognises the gap between traditional market participants and regulatory-compliant solutions for issuing and trading real-world assets on-chain.
“The FTX and Celsius crises last year only highlighted key structural and regulatory weaknesses in the market, demonstrating that crypto collateral is too highly correlated and easy to manipulate,” says Lehes.
Swarm seeks to overcome such weaknesses with its hybrid platform combining the depth of liquidity, the value of traditional financial markets and the advantages of blockchain technology.
It has become the first DeFi platform to offer and trade tokenised treasury bills and stocks, with its secondary trading activities being regulated by Germany’s Federal Financial Supervisory Authority (BaFin).
“We operate within the German regulatory environment, meaning we can issue and trade real-world assets on the blockchain, unlike any other entity,” Lehes continues, before adding that regulation in the right parts of the ecosystem is “critical while decentralisation enhances the transparency required to build trust.”
The platform’s announcement on the launch also confirms its intention to develop more stock and real-world asset offerings in the near future.
“We have started with stocks and bonds, and will soon extend this to any asset that needs to be traded on a regulated platform, from carbon credits to real estate or private holdings,” concludes Lehes.
Trading is currently available from Thursday 24/7 and compliant with German regulations on Swarm’s permissioned DeFi platform.