BaFin-regulated Swarm adds more tokenized stocks to decentralized exchange
“Tokenization is drastically expanding the DeFi landscape. By trading tokenized real-world assets, investors can access 24/7 markets that have greater flexibility.”
Swarm has announced the addition of seven tokenized real-world assets to its decentralized trading platform following a community vote.
The tokenized versions of Blackrock, Coinbase, Coupang, Intel, Microsoft, Microstrategy, and NVIDIA shares are now live for trading on the Swarm DEX.
Underlying assets are held by institutional custodians and tokens can be redeemed for the value of the underlying asset anytime. Monthly disclosures of assets in reserve are made publicly available.
The addition of these seven new instruments follows the launch of tokenized stocks and bond ETFs on February 24th, 2023, including Apple, Tesla, iShares US treasury bond 0-1 year ETF and iShare US treasury bond 1-3 year ETF.
During the first quarter since the abovementioned launch, Swarm’s user base grew by nearly one-fifth (17.6 percent), with active token holders increasing 16 percent in month two, from March 24th to April 23rd compared to month one 24 February to 23 March, and 4 percent in month three, from April 24th to May 23rd, the company stated.
“Responding to investors’ desires both on the retail and institutional side”
Philipp Pieper, Co-founder of Swarm, commented: “Swarm is a hybrid between the wild west of crypto and traditional centralized exchanges. Whilst we need to satisfy compliance concerns, we are a DeFi community at heart and it is imperative our users’ voices help drive product innovation. This is the first step to ensure our platform is continually responding to investors’ desires both on the retail and institutional side.”
Timo Lehes, Co-founder of Swarm said: “Tokenization is drastically expanding the DeFi landscape. By trading tokenized real-world assets, investors can access 24/7 markets that have greater flexibility. The significant growth of users and demand seen in the first quarter is a testament to this and highlights investor demand for a more diverse set of assets available on chain.”
SwarmX GmbH, the issuer of the stocks and bonds tokens, is a wholly-owned subsidiary of Swam Markets GmbH, under a prospectus registered with the Financial Market Authority in Liechtenstein and passported into Germany. Trading activities on Swarm infrastructure fall under the purview of BaFin in Germany.
Secondary trading activities are regulated by Germany’s Federal Financial Supervisory Authority (BaFin), and can be accessed on Swarm’s permissioned DeFi platform.
Hedge funds and institutional investors can now access stable and secure global markets 24/7 through Swarm. For those already on-chain, including stablecoin issuers and treasury managers, it means they have less volatile assets to deploy into without needing to leave the DeFi ecosystem.
Swarm does not take custody of the asset-backed tokens. They can be added to liquidity pools to earn yield, or kept in investors’ own Web3 wallets.
The ISIN-based tokens benefit from the trust and stability of traditional markets plus the flexibility and greater access to global liquidity, at lower cost, on the blockchain. Stock and bond certificate tokens are integrated with traditional financial markets and can be redeemed for the value of underlying real world asset.