Swarm Joins The OpenFinance Network (OFN) Bringing Its Tokenized Securities To The OFN Platform
There is a buzz building up within the crypto community, especially within the Ethereum side of the blockchain family. There is some big news on the cards (it should be stated that this has been coming since at least January this year).
All the excitement comes from a recent partnership between Swarm (SWM) and the OpenFinance Network (OFN). Ostensibly, this partnership is going to see the listing and trading of investments tokenized by the Swarm Fund on the OFN platform.
This will bring about more market participants, more exposure and in turn, more liquidity. Swarm is an Ethereum based platform that also issues the SRC-20 token, the only security token standard that is live.
The SWM token adheres to the SRC-20 token standard but, (and this is what brings Ethereum into the picture), its properties extend the ERC-20 token standard.
It does so by baking into each token the properties that represent real-world assets. Such features include the token’s purpose, location, legal rights, and security obligations.
For example, groups of token holders can purchase banks, football teams, agricultural projects, schools, and even highways and then vote on how to use pooled funds.
— Swarm Fund (@TheSwarmFund) September 17, 2018
The SRC20 are asset-backed tokens that represent ownership in a project or asset, much more like what a share in a given stock is. Up recently, all SRC20 tokens could only be traded on the Swarm Network Exchange.
However, the design of the token allows it to be interoperable across regulated exchanges permitted to offer security tokens.
The partnership between Swarm and OpenFinance Network allows for tokenization of real-world assets and investments.
With the SRC-20 security token, a user has partial ownership in a given asset or investment. It is this fractional ownership that grants the token holder the right to participate in its governance.
However, the Swarm Fund token has other benefits that make it have a certain degree of appeal should its collaboration with OFN be successful.
Swarm makes trading security tokens easy and compliant
The tightening of regulatory oversight over exchanges means that for investors to trade security tokens within regulatory compliance, parties must conform to KYC requirements and restrictions as well as standards set by the U.S Securities and Exchange Commission.
Swarm makes this process easy for exchanges, investors, and crypto service providers through the Market Access Protocol (MAP). With this tool, all participants within the SRC-20 ecosystem benefit from effective interactions and enhanced privacy.
MAP is essential as a standardized protocol within the security tokens marketplace and will combine with OFN’s highly interoperable platform to revolutionize the ownership of assets. Among the beneficiaries will be holders of tokens that have suffered the lack of security asset infrastructure.
It also offers token holders access to liquidity involving both the current as well as future private equities. These will also include opportunities to be part of any future investment that Swarm Fund may offer.
Just as well, the Swarm Fund’s use of intelligent AI and Workflow Automation are likely to be game changers within the investment industry, allowing users to maximize their returns using smarter and better tools.
If it works, one thing that is likely to happen is the increase of asset-backed security tokens on the Ethereum blockchain.
Most of the crypto community is upbeat about the potential for the SRC-20 token standard to change the cryptocurrency market and trading landscape. However, there’s a need to remain cautious as the entire ecosystem is still in infancy.
Swarm was founded in 2014 and launched its token sale in October 2017 before going live in January 2018. The SWM token traded at a high of $1.65 in February but has steadily declined to trade at $0.12 against the U.S dollar currently.