Swarm, a DeFi platform headquartered in Berlin and regulated by Germany’s BaFin, has unveiled “Open dOTC,” a permissionless trading platform catering to tokenized real-world assets, in a move to offer a public goods service.
This platform, constructed on Ethereum, harnesses decentralized over-the-counter (dOTC) smart contracts. These contracts aim to eradicate slippage, ensure immediate settlement, and curtail credit and counterparty risks by fully securing trades, as per an official statement.
At launch, Swarm’s tokenized U.S. treasury bond ETFs are accessible, and plans are in place to incorporate tokenized shares from publicly traded companies such as Apple and Tesla.
“Adoption of tokenized assets faces hindrances due to the absence of viable trading platforms,” stated Swarm’s co-founder, Timo Lehes. “The introduction of this public goods service expands access to the booming RWA narrative seen in 2023.”
Swarm maintains that, under the Union’s Markets in Crypto Assets regulation, sufficiently decentralized applications do not fall within regulatory purview. Nevertheless, the Association for Financial Markets in Europe cautioned against excluding DeFi from MiCA, citing potential regulatory arbitrage opportunities.
The platform ensures compliance with EU prospectus regulation in Liechtenstein for tokenized assets, requiring issuance and redemption from wallets that have undergone know-your-customer and anti-money laundering checks. However, Swarm noted, “Tokens remain transferable between wallets and are accessible to retail investors without minimum investment requirements.”
While offering Open dOTC, Swarm affirms its commitment to operating a permissioned platform for those necessitating regulated DeFi trading infrastructure.
“Having navigated the regulatory process for three years, we’ve gained an edge over many players in this domain,” expressed Swarm’s co-founder, Philipp Pieper. “We recognize the crypto and DeFi community’s belief in permissionless infrastructure, and Open dOTC has been crafted with them in mind. While innovation has predominantly occurred in the unregulated DeFi space, regulated entities are now capitalizing on it”.