To store tokens built on the Ethereum blockchain, including SWM, you will need an ERC20 compatible wallet. If you are new to crypto, know that this is different from a wallet you might use to hold ETH, such as your Coinbase wallet.
There are a number of different options for ERC20 wallets, and we don’t endorse one over the others. For the purpose of this FAQ we’ll explain how to setup with myetherwallet.com (MEW) but here are a couple other options to consider:
The Mist Ethereum Wallet – https://github.com/ethereum/mist/releases
Runs locally on Desktop
Can take a while to sync with the blockchain
MetaMask – https://metamask.io/
Easy to use Chrome Plugin
MyEtherWallet – https://www.myetherwallet.com/
Ledger and Trezor Compatible
Setup Instructions for MyEtherWallet:
1. Go to https://www.myetherwallet.com/
2. Enter a password of your preference
3. Download your Keystore file on your computer
4. Save Your Private Key + Print your paper wallet
5. Unlock your wallet using your “Keystore File (UTC / JSON)” and your password to see your address
6. Note the wallet address, starting with 0x****
7. Store your paper wallet in a safe place and don’t lose it…!
You can also check out this video we made on ‘participating in your first ICO’ that covers this setup process and some other crypto fundamentals.
See further FAQ for how to add SWM to your wallet and how to check your liquid token balance.
To add the Swarm (SWM) token to an ERC20 Ethereum-based wallet, you need to fill in this address: 0x9e88613418cf03dca54d6a2cf6ad934a78c7a17a ; token name = SWM ; digits = 18
No middleman: in Swarm’s case the investor has a direct ownership of the SRC20 tokens released on the opportunity.
Other asset classes: crowd-sourcing platforms are normally targeted to venture investments, to-be-launched products highly verticalized or territorially limited. Swarm is available on a broader basis.
Swarm Fund uses a drip liquidity release method. Investors will be able to vote on the liquidity parameters between October 30 14:00 UTC and November 6 23:00 UTC. The liquidity parameters will be selected from a fixed set, such as:
Days per period: 21, 42, 63 or 84
Number of periods: 4, 8, 12 or 16
We hope the community understands that we are not able to comment on trading and transfer of Swarm Tokens for legal and regulatory reasons. We also need to be clear that transfers are not currently allowable in the US or to US persons unless in compliance with an exemption under the securities laws. Purchasers have to make that determination themselves. Non-US purchasers should check the laws of their home country to ensure they are in compliance with any laws restricting transfers.
If you purchase during:
1st Presale (ended on Sept 5)
1st Token Sale (Day of Sept 7)
You can see your tokens in locked form, as of Sept 7.
If you purchase during:
Continued Presale (Sept 8 – Oct 18)
You will see your tokens in locked form, on Oct 21, at beginning of Token Sale.
If you purchase during the 2nd Token Sale (Oct 21 – Oct 27)
You will see your tokens in locked form, at the time of purchase. On Nov 6th – Your First Portion of Tokens are Liquid. The portion, originally 1/8th, will be newly determined by the Voting Period.
About Swarm Fund
“Swarm Intelligence” is a scientific field that arose from the study of self-organizing biological systems. Many species make heavy usage of multi-track systems to incentivize socially positive behavior. This allows complex life to develop and evolve in a dynamic fashion. In many ways, this is similar to the mathematics behind fractals. This formalization of rules happens at the level of harmonic principles, rather than at the specific structural level, as often happens with hierarchical organizations.
As referenced in the white paper, that was released prior to the 2017 public token sale, the Swarm Fund organization is an operation under the terms of being an “unincorporated non-profit association”, (…) as described in the results of the Harvard summit with the intent of creating a global platform cooperative. To actualize these aims, Swarm is working with the following legal affiliate entities: Swarm Operations (Germany GMBH), Swarm IP (Singapore), [Swarm Operations (US)], Swarm Research Foundation (Panama), Quantum Holonic Swarm Systems (USA), and Swarm Asset SPVs (Cayman, Estonia, Lichtenstein etc.)
As referenced in the whitepaper, “the current board members are Philipp Pieper and Timo Lehes, with three spots left to be filled by either community contributors or managing directors of partner funds dependent on a vote of the token holders. (…) [Open] board seats will go up for vote every six months.” The next board seat is anticipated to be filled by April 29th, 2018, 6 months after the end of the public token sale.
As the Swarm Fund project moved into execution in November 2017, Joel moved on to focus on doing his personal investments and other projects outside of Swarm. Apart from an independent consulting assignment to provide evangelist services, Joel has not been operationally involved with the Swarm Fund organization for some time. At this point, while Joel is a co-Founder, he does not hold any operational or executive function, nor is he a board member of the Swarm Fund organization.
Swarm Fund attempts to apply this concept (formally known as “stigmergy”) to finance through blockchain technology. In particular, reputation plays a key role as different system behavior is tracked and positive behavior is incentivized. Consequently, the greater the trust and transparency and effectiveness of the underlying system, the less formal command and control methods are needed and the more finance can be fully automated. Although we started entirely internally to the blockchain community, this ostensibly applies to all asset types.
Swarm Fund was inspired by the idea that smart contracts could lead to greater trust, transparency, and access in finance. It initially launched as a membership network dedicated to this purpose in the summer of 2014 and ran a successful $1mm blockchain crowdfunding campaign that was the first of its kind.
After launching a “Silicon Valley” style incubator house it also helped develop, fund, and launch several projects, including Bitcoin Comic book, Woodshares (the first dedicated crypto-asset fund), and several other projects that remain in stealth mode.
Additionally, the founders realized many of the barriers to creation on this space were regulatory and worked primarily on governance and organizational design, including speaking at various industry events, including partnerships with Singularity University, Agentic Group, and ExO Works.
After key learnings from these engagements we began implementing the most advanced blockchain governance system developed to date, which integrated concepts of liquid democracy, futarchy, and reputational systems.
We are currently focused on hard assets that have mostly been neglected within the crypto-asset world, especially unique financial assets that would highly benefit from automation. For example, we are looking at real estate, distressed real estate, art, and SaaS platforms. All of these highly lend themselves to tokenization. That said, we believe that all types of investment are highly likely to benefit from a reputation-based model.
The Swarm platform makes money through a similar mechanism to Ethereum’s Gas. Fund managers and investors pay for the utility functions they receive with tokens. The Swarm network is receiving payment in Swarm tokens, similar to how the Ethereum network receives Ether as gas.
Swarm was designed from the outset as a regulatory compliant platform, with a clear separation between utility tokens and security tokens. The Swarm foundation offers utility functions to Fund Managers and Investors alike. The value of these services is propagated to a distributed network of providers.
The Security tokens representing interests in underlying funds are offered by separated legal structures (SPVs), through a fully compliant regulatory framework, including check for KYC/AML and Accreditation where applicable.
The security tokens are offered to Accredited investors and Qualified purchasers.
The Swarm platform provides exposure to a wide variety of security tokens with different risk/reward levels. Depending on each investor’s objectives, there are funds with high risk/high return strategies, as well as stable coins representing stable underlying assets, such as, real estate or fixed income.
Swarm does not provide investment advice, so it is up to each investor on the Swarm platform to choose the investments they find would meet their objectives.
You have the right to vote on matters put forward by the community, including nominating matters for voting by the community. One such matter can be to vote on the categories of funds that should be connected to Swarm, e.g Real Estate, Impact Funds, Donation based funds etc.
Massive learning on legal side – In addressing the regulatory issues that surfaced for Swarm 1.0, Swarm 2.0 has involved the most experienced lawyers in the crypto space to mitigate regulatory risk. One of the key improvements is the token architecture for Swarm 2.0, which is distinctly divided into a utility token (Swarm) and a security token (SRC20).
Real go-to market strategy – Whereas there was a lack of clarity around Swarm 1.0 asset types, Swarm 2.0 has partnered with a number of proven funds leading up to it’s launch. Examples of asset types in Swarm 2.0 are Real Estate and Venture Capital.
Frugality and operational efficiency -The Swarm 1.0 team were early visionaries within the crypto space and were lacking operational experience to build out an investment grade platform. In particular, key additions to the Swarm 2.0 core team bring a wealth of experience from both technological entrepreneurship and traditional finance, as well as the identification of unique financial assets and related opportunities. The value of funds raised for Swarm 1.0 were eroded by the decrease in Bitcoin price from $600 to $200, reducing operational capital significantly.
The market has changed – Since the launch of Swarm 1.0 the crypto currency market has matured significantly. Ethereum as a platform is significantly improved, smart contract security has evolved, the market capitalization of crypto currencies increased by a significant multiple, including the participation by mainstream financial institutions. In terms of timing Swarm 2.0 has the necessary pre-conditions to build a global market infrastructure for alternative investments, conditions that did not exist at the time of the Swarm 1.0 launch.
Swarm is launching with two distinct funds in the Alpha launch.
i. Distressed Real Estate Fund.
ii. Pre-IPO tech fund, i.e invest in AirBnB and Uber before their IPO.
Yes, our white paper, which outlines the various components that make up the network stack is available here.
Swarm Platform Mechanics
There is a clear separation between the Swarm token (the utility used to pay for services) and security tokens on Swarm. The individual security tokens on the Swarm platform have the potential to create financial returns.
The Swarm token is a utility token with limited supply, used as a payment mechanism and voting right for token holders on the Swarm platform.
The whole system is designed as a non-profit which maintains the platform technology with multiple nested sub-funds. Fees are designed to make all sub-funds pay a platform fee in order to exist and participate, and to provide on-going funds for maintenance of the “commons,” which presumably enhances the overall network effect. The primary fee is the “carry” which is a common design feature in venture capital and hedge funds and which means that the platform accrues money when people who are using the platform make money. This will be a minimum of 1%. There may also be usage fees and processing fees for the platform either through us or third-party payment processors.
We will have a tiered release cycle in which the platform will remain in a stable state on a private blockchain for several months before official release onto a public one in order to give us sufficient time to iron out any problems.
Our initial smart contract implementation is on Github.
Swarm and the Blockchain Technology
Some articles worthwhile reviewing:
What is Ethereum?
BitCoin vs. Ether – video series
Blockchain is Eating Wall Street | Alex Tapscott | TEDxSanFrancisco
Ethereum is the first fully implemented smart-contract capable platform and the one with the most liquidity. It is also arguably the best maintained and robust. For example, as of the writing of this the total market cap of Ethereum is approximately $900M with over $100M in tradable assets issued on the Ethereum blockchain. Additionally, although there are other platforms which contain some element of asset issuance and tradability, only smart contract capable platforms like Ethereum have the ability to dynamically control funds via embedded governance protocols. For example, the stake-weighted liquid democracy system we have created would be considerably more difficult on a different platform.
The DAO was a fascinating experiment that appropriately garnered a lot of attention for doing something that was extremely ground-breaking. Unfortunately, it may have attempted to do too much too quickly. Our implementation has started with a more robust governmental model and has several checks and balances that prevent technical failures from causing damage to real assets.
The DAO was an ownerless venture capital fund driven by majority consensus deployed as a DAO. It shows, among other things, the enthusiasm in the market for such a solution. Its major flaws included a rush to market, an overly centralized single implementation, a lack of a solid governance model that allowed for evolution, and distributed economic incentives that did not allow for individual achievement.
Our model is different from the DAO in that each project resembles a traditional company in its ownership structure. Ownership is gradually sold off over time to the crowd and it becomes autonomous in stages as the technology and model are proven. This allows rapid decision making and iteration during the early stages of the project when this is necessary and some degree of pivoting and technological upgrades that may be necessary during the implementation.
Our model is deliberately modular in the sense that funds are pooled around projects and that each project has its own set of incentives and can succeed or fail without affecting the overall network. This means that each individual can decide on the value of various offerings on their own without an extensive or complicated consensus process.
Our model also has an ‘innovation tax’ which is taken from each project and goes back to fund public goods that can benefit the overall network, rather than somehow attempting to take this out of the actual fund itself. We also believe raising less capital but having a coherent governance structure and high quality business opportunities will allow significant appreciation in the base asset.
|The DAO||Swarm Fund|
|Organizational model||Centralized (single mega-fund)||Modular (each project is distinct)|
|Governance model||Full democratic voting||Stake-weighted delegated voting|
|Curation model||By “curators” prior to listing||Post facto by community|
|Sale model||All at once||In stages based on needs at the time|
|Blockchain model||Ethereum Foundation’s official chain (ETH)||Can be deployed across multiple chains|
|Liquidity model||Full immediate liquidity||Escrow model with liquidity released over 12 months|
|Infrastructure model||Needs to be funded by vote||Consistently applied innovation tax that goes back into funding base infrastructure|
As with all software systems, you are potentially vulnerable to problems in poorly written code or in the underlying system infrastructure (e.g. compiler/interpreter). In the case of the DAO Hack there were elements of both which turned out to be particularly explosive in combination.
Additionally, as with all prominent and open elements of high financial value, the DAO made itself the subject of intense scrutiny and attracted sophisticated attackers. In this sense, we expect that our system will over time attract the same level of attention.
Consequently, it is our desire to make sure that all of the different levels of our stack are adequately trialled and audited before release and make sure there are adequate safeguards in the case of technical failure.
To this end, we have adopted a tiered roll-out mechanism similar to the Ethereum versions, in which the first implementation exists on a private blockchain and goes through versioning and release cycles in which the functionality is tested and made available. Additionally, all source code is open source, following industry best practice, undergoing multiple levels of third-party auditing.
Additionally, we have introduced Szaboian-nested intent clauses in our non-profit to enforce intent even in the case of smart contract failure.
It is a concept coined by Nick Szabo based on the legal systems of the middle ages in which there was a standard interpretation of a legal clause including an “override function”. This means a third party could interpret whether ethics and intent had been appropriately followed. This was possible due to the difference between feudal and religious court systems and their different domains. Within the world of smart contracts this effectively means that the intent is codified first then the smart contracts represent an implementation of the intent. It also means that at a point in which the implementation diverges from the intent, the third party can make sure that the intent is followed. In our case, an Estonian non-profit serves as the third party to the smart contract implementation, acting as both custodian and enforcer of intent.
Up until now there have not been any decentralized marketplaces that were governed by their members, nor any that evolved alongside a reputational system. Additionally, all decentralized marketplaces have looked primarily at internal blockchain types of assets rather than structured real assets with unique financial instruments that lend themselves to automated investment.
We believe that the combination of real value, automation, and reputation is a generalizable model that can provide clear short-term value and can evolve into an industry standard for all investment systems that benefit from increased trust and transparency.
As one of the ostensible values of blockchain smart contract systems is immutability, we are strong supporters of the idea behind Ethereum Classic. That said, we think the current state of this system warrants a gradual iterative attempt towards a more stable overall system state and that, due to the need for technical upgrades and bug fixes, some sort of generalizable upgrade path is necessary. At the moment “hard forks” are one major necessary component in iterating on the technology.
Also, there would have been severe regulatory and other repercussions if all the investors in the DAO had lost their finances which would have set back general Ethereum-related development. Consequently, we supported both the decision of the hard fork for the Ethereum Foundation and the continued existence and maintenance of Ethereum Classic by other parties. An added benefit of Ethereum Classic is that it removes any general liability concerns for “projects gone wrong” (such as clearly was the case with the DAO).
The development of Ethereum Classic, including whatever methods will be used to create decentralized consensus, still remain somewhat undefined. It is possible, however, that the community will rally behind the liquid democracy solution we have created, which would give us a good reason to deploy first in the Ethereum Classic world.
The current standard model of securing blockchains is highly dependent on certain economic models that are still experimental. Most problematic is the idea that over time block rewards can be superseded by transactional costs. Also problematic is the high degree for which incentives are weighted towards early adopters. These two, in conjunction with the high cost, the otherwise uselessness of mining, and the centralization of mining operations themselves, do lead one to look for other methods for securing blockchains.
Consequently, we are actively following all types of consensus mechanisms that have been proposed, including sharding, proof of stake, tendermint-style consensus, and various types of quantum-inspired consensus, without any definite conclusions, except that we wish to remain engaged at the protocol level as well as the technological level.
Our general process is effectively two-pronged. For our implementations we look for stable production-ready blockchains that can run related technology with the expectation that the blockchain will still be working in roughly the same fashion in five years. This is a significant upgrade from our 1.0 implementation which was more able to be deployed on technologies that themselves were in prototype form.
Secondarily, we remain active in our engagement in long-term research, especially the intersection between quantum physics and computer science where we are especially closely engaged. These types of technologies we expect to emerge into usable systems within the 3-5 year range and we are generally more optimistic about these for maintaining an overall stable state.
Mining / Network: Bitcoin is a Highly Centralized Network, Says Harvard Researcher
Overall impact: How Digital Currency Will Change the World, by Coinbase CEO Brian Armstrong
Crowdfunding / ICOs:
App Coins and the dawn of the Decentralized Business Model
All you need to know about ICOs