Blockchain for private equity firm Swarm has partnered with decentralised autonomous organisation MakerDAO to integrate the Dai token into the Swarm platform.
Swarm writes that this will give Swarm’s community of accredited investors a greater capability to lock in crypto prices, using the world’s first decentralised stablecoin on the Ethereum blockchain.
“When we connected with the MakerDAO team, we found them to be like-minded, community-focused technologists. Our cooperative relationship will provide new ways for our investors to create and protect their value,” says Philipp Pieper (pictured), CEO and Co-Founder of Swarm. “It removes what has been perceived as the risk and volatility of some crypto markets.”
The move means that Swarm investors will be able to lock in value using the Dai stablecoin in two phases. The first phase is live now and enables investing with Dai, which is pegged to the US Dollar. The second phase will allow investors to lock in the price of the crypto they invest on Swarm, with Bitcoin or Ethereum converted to Dai, locking in the price at the time of commitment to an investment, or automatically based on ceiling and floor prices set by the individual investor.
“Our mission at Maker is to harness the power of the blockchain to create a more level playing field and economic opportunities for individuals and institutions around the globe,” says Rune Christensen, CEO and co-founder of MakerDAO. “Integrating Dai into Swarm unlocks new levels of stability, power and access for their class of accredited investors.”
Under Swarm’s original three-tiered token model, investors would be able to exchange crypto or fiat for dollar-pegged Swarm SUN tokens, to then be used to invest in the funds on the platform. Those SUN tokens would then be converted into intelligent, SRC20 security tokens for each opportunity, giving the holders a tokenised version of the real-world assets behind the investment. The firm writes that the basic mechanics of that model remain, but with Dai tokens now immediately providing those stablecoin benefits for investors.
“When Swarm was first envisioned, the three-tier token model included the SUN stablecoin layer converting cryptos into a dollar-pegged coin for the deployment of capital into funds,” explains Timo Lehes, Co-founder and Chief Investment Officer. “The Dai stablecoin is everything we wanted SUN to be, and more. Maker has already established a DAO, built a clear backing structure for Dai, and are seeing rapid adoption, recently doubling their debt ceiling based on growing utilisation of Dai.”
Swarm is designed to make traditionally exclusive investment opportunities, such as private equity and hedge funds, inclusive for the Swarm by pooling together smaller investments into larger, institutional-sized blocks.
Swarm gives fund managers access to capital from a new class of investors who want access to institutional-type investments, but don’t have the high minimums many institutional funds require. By leveraging blockchain technology, Swarm is designed to provide an entire platform from which businesses can create cryptocurrency-based enterprises with a wellspring of built-in funding.
