Published October 20, 2017
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Date: October 20, 2017
Categories: Financial Technology, Markets Exchanges, technology
Keywords: Swarm Fund, Cryptocurrency
Swarm Fund, a decentralised capital marketplace that provides cryptocurrency investors access to high-return, institutional-style investment funds backed by real-world assets, today announced the opening of its public token sale, slated to run from October 21 through October 27, 2017. The fund closed its token pre-sale on October 17th with US$5.4M raised (S$7.34M).
"Swarm's launch represents the next iteration of crypto and blockchain technologies, while bridging the gap between traditional finance and the rapidly innovating cryptocurrency space," said Joel Dietz, cryptocurrency pioneer, partner and co-founder of Swarm Fund. "The first wave of crypto was a peer-to-peer transactional system, with bitcoin. The second wave came when Ethereum brought us smart contracts, and the programmability of crypto-tokens and other digital utilities. The third wave will be the securitization of those digital properties, backed by real-world assets such as real estate and brick-and-mortar companies, traded on the blockchain."
Founded by Dietz, serial entrepreneur Philipp Pieper and fintech investor Timo Lehes, Swarm Fund allows individual investors to pool their resources and invest into alternative assets and institutional asset classes, starting with private equity funds, without the high dollar minimums or lengthy capital commitments often associated with those accounts. At the same time, it opens up a new capital stack for fund managers looking to increase the liquidity of their offerings. Pilot funds on the platform are slated to focus on distressed real estate, solar installations, software-as-a-service and cryptocurrency companies.
First Liquid Democracy Vote and Co-operative Governance Framework
Token holders will be able to participate in Swarm's inaugural liquid democracy vote, believed to be the first of its kind for a crypto enterprise, to determine the Swarm (SWM) token's initial liquidity release structure, from October 31 to November 3.
"By using the services and infrastructure this platform provides for our own launch in the form of our inaugural liquid democracy vote, we are literally eating our own dog food," Dietz says. "That also means we are launching with a working, functioning product to offer to the marketplace. This is the same technology we will be providing to projects on the platform."
With a structure similar to a co-operative, Swarm Fund will be owned by its members, who will also determine, through the liquid democracy governance system, the administrative and philosophical direction of Swarm Fund. Liquid democracy blends aspects of direct and representative democracy by allowing individual members to vote directly on an issue, or delegate their vote to an expert they trust.
This structure can also apply to future endeavors launched through the Swarm. By leveraging the efficiencies of blockchain 3.0 technologies, Swarm provides an entire platform from which businesses can create and run new, crypto-centric enterprises, with a wellspring of funding built in. "Our goal is to redefine and evolve what co-ownership means," Dietz says. "This allows people from all over the world to own and create new things together, without restrictive hurdles between them."
A Disincentive to Pump and Dump
To discourage "pump and dump" buyers, Swarm Fund will institute a "drip" liquidity system to initially lock tokens on the platform, and release them over time for trading. The specific timeframe for that system will be decided by Swarm members in the inaugural liquid democracy vote.
Vetted Regulatory and Compliance Model
Swarm Fund's operating model is based on the recommendations from Distributed Networks and the Law, the seminal academic paper on the intersection of blockchain technologies and regulatory compliance. Produced at the Harvard Berkman Center in 2014, the paper was the result of numerous contributors in the blockchain and regulatory fields, including Dietz.
"We've put in the legal legwork over the past three years to make sure we were a part of the discussion around regulation, versus trying to fight it," says Dietz, who notes that this purposefully thought-out legal structure is particularly important in the context of evolving cryptocurrency regulation globally. "As people realize that they can't just blissfully ignore the regulatory environment, it provides a great opening for projects like Swarm Fund, which has been deliberately designed to engage regulators, while providing a compliance-oriented platform for other, legitimate companies to launch in the crypto space," said Dietz.
Re-disseminated by The Asian Banker