Swarm Markets announces trading tool to tackle crypto volatility
“We tend to see more volatility in crypto markets in the months of December and January, resulting in high slippage for larger trades.”
Swarm Markets, a Berlin-based regulated decentralised financial infrastructure provider, will launch a peer-to-peer contract for high value transactions in Q1 2022, the firm announced.
The move might garner attention from institutions and professional investors as the so-called dOTC service empowers them to use a regulated crypto block-trade smart contract for over-the-counter (OTC) trading.
Crypto volatility is higher in December and January
Using decentralized technology is expected to reduce costs and increase the speed of execution for market participants in a time when high volume swap activity increases significantly.
In the past year, the number of unique traders executing trades over $500k has increased by 140% from March to September 2021, according to a report by Messari Hub.
Timo Lehes, co-founder of Swarm Markets, said: “Because Swarm Markets is regulated to the same degree as any other German financial institutions, dOTC users can trust our infrastructure to carry out block trades with verified counterparties only. For the first time, institutions with a fiduciary responsibility now have a compliant trading tool they can use to minimize or remove crypto slippage.
“Crucially, our trading infrastructure preserves the architecture and innovation of DeFi with the reassurance of regulation. dOTC preserves elements like self-custody, so participants have control over their assets at all times.”
Available from ERC20 to ERC721/1155, including NFTs
Phlipp Pieper, co-founder of Swarm Markets, added, “The timing of this announcement is crucial as institutions have very few, if any, viable and trusted trading tools in DeFi to help ride out crypto volatility. We tend to see more volatility in crypto markets in the months of December and January, resulting in high slippage for larger trades.
“Swarm Markets is in a unique position to offer decentralized trading infrastructure in both crypto and traditional financial products. This contract will become a key feature for institutions to support bulk selling and buying of securities on chain, using Swarm Markets DeFi infrastructure, launching in Q1 2022.”
Eliminating the need for intermediaries, Swarm Markets’ dOTC smart contract enables platform users to safely execute a buy or sell order directly with other platform users in minutes instead of days or weeks—and for a tiny fraction of the price, the firm explained, adding that the contract can be used for a wide range of digital assets, from ERC20 to ERC721/1155.
High value NFTs are included in the equation as that market segment is finding adoption. The service also facilitates smoother liquidation of crypto positions and enables contract-based block trades for upcoming regulated digital securities.