Launchpool x Swarm Markets AMA Summary
Date & Time: July 8th, 12:00 UTC
Guests: Philipp Pieper & Timo Lehes (Co-Founders of Swarm Markets)
Host: Sam Harvey - Launchpool Project Manager
Launchpool was excited to host the Co-Founders of Swarm Markets for an interactive Ask Me Anything session with the Launchpool Community. The AMA comes in anticipation of Swarm Market’s $500k Allocation Mining Event on Launchpool coming July 12th. The session lasted for 1hr, and consisted of questions from the Launchpool Team and questions from the community.
Questions from the Launchpool Team:
Sam: In anticipation of the upcoming AME on Launchpool on Monday, we have Philipp Pieper & Timo Lehes (Co-Founders of Swarm Markets) joining us for an AMA.
Hello & Welcome, great to have you both here. If you could start by telling us a bit about yourself, your background and your involvement with the space.
Philipp: I’ve been a serial entrepreneur since starting my first start-up in 2000, but I also held positions at Deutsche Bank and Allianz Group. I’ve had several successful exits and taken a company public in the US. Bram Cohen, the inventor of Bittorrent and Chia Networks, got me into crypto around 2015 and I’ve founded several startups and made crypto investments along with Timo since then.
Timo has a background as a tech entrepreneur and investor in tech companies. Ran an early stage venture capital fund with institutional investors. Moved to Palo Alto to work with investment portfolio. Set up an SEC licensed financial services firm in Palo Alto. Got involved in crypto in 2016. Co-Founder Swarm Network and Swarm Markets.
Amazing! An impressive background. Could you tell us about the rest of the team? (backgrounds, experience, etc.)
Timo: Team background for tech and marketing have a background in Fintech and crypto. Our lawyer is recognised for his work in crypto in Germany. We have a head office in Berlin, but the team is geographically distributed. Investors and advisors are private equity and hedge fund people. There are about 20 people involved in the project.
What problem are Swarm Markets trying to solve? What is the overall vision for the project?
Timo: Overall vision is to expand the crypto and DeFi markets by bringing these innovations into a reg licensed structure, so that institutions and family offices can engage in this market. Today, a lot of investors and traders are sitting on the sidelines due to regulatory uncertainty and failure to meet compliance requirements by many existing platforms.
Philipp: Our experience working on security token issuance in previous projects showed us that there was an unresolved issue with finding liquidity and compliant markets for digital assets. This was holding back the entire industry and was keeping a lot of issuers from tokenising.
Swarm Markets is partly a response to that — a platform where one can instantly have a highly liquid market to trade on or provide liquidity for. And this can apply to digital assets that we issue as compliant tokens under our banking license, but Swarm Markets is also open to digital assets that have been issued elsewhere.
The regulated aspect is clearly a huge deal and I think this goes someway to answering my next questions which is: How are you differentiated from other similar projects?
Philipp: We are in a league of our own at the moment.
1/ There is no other DeFi platform where a hedge fund or a bank can stake liquidity — they must trade on a compliant platform if they want to put billions of dollars in assets into DeFi. That situation isn’t all that different from regular traders either though.
2/ We can add new elements to the DeFi game, as the concept of networked liquidity + smart contract based transactions + self-custody can be extended to other assets than what is in DeFi today.
Crypto headlines have been packed with stories about regulators in countries across the globe shutting down crypto exchanges. It’s getting to the point where the risk of dealing with an unregulated exchange is preventing a lot of people from deploying all the assets they’d like to put into crypto.
Right now, Swarm Markets is the only place that’s sheltered from that kind of instability and provides confidence to existing actors and new entrants.
There is definitely a clear sentiment of “crackdown” on unregulated exchanges. Could you please talk a little about where you are at in your roadmap? Could you talk us through the next steps.
Timo: We are ready to launch our AMM! Development is complete and we are currently onboarding the first liquidity providers now.
Philipp: The first version of the platform will go live shortly, starting with early liquidity providers and then opening up to the public. Most likely this will coincide with the first SMT token liquidity release, around August 1st.
At first the platform will feature standard AMM functionality: Asset swaps, liquidity provision into pools, fee discounts for SMT holders, rewards for liquidity providers and traders, etc. Technically speaking, subsequently to public launch, more completely new features will roll out within Q3.
On the asset side, we are starting with all the crypto heavy hitters: BTC, ETH, DAI, and (of course) SMT. But the markets will extend to other assets soon after and include ones that are entirely new to crypto.
Timo: What’s really exciting is the new products we are going to be bringing to the platform in the weeks and months after launch. We have been working with asset custodians to bring tokens backed by real assets to the platform. I can’t say what will come first, but yield bearing staking products, commodities, and some derivatives are all in the pipeline post-launch.
I remember reading about you having some big liquidity providers on board already so you can be set up from launch. My next question is: How was the project funded up to this point and how will the funds from the AME be used?
Philipp: The project is privately funded. On top of self-funding, we’ve recently taken capital investment from investors familiar with the capital markets. This is the reason why we could have achieved our regulatory status and a live product ready for launch prior to the AME.
Timo: The AME funds are exclusively allocated for developing the token economy and ecosystem through exchange listings, market making, AMM liquidity etc. AME funds are not used to fund operations, team or product development since we have private investment to cover that initially. Later revenues will of course replace the need for outside capital.
Thanks for the info! Are there any strategic partners (excluding Launchpool) that you can share?
Timo: Yes, we have some that are yet to be announced, but for example we are working with Copper for custody and Pessimistic.io for Smart Contract Audits.
I’ll keep a look out for future partnership announcements. What made you choose Launchpool as your partner for the AME?
Philipp: Timo and I have known the team behind Launchpool for quite some time. Timo is a Launchpool member and he introduced me to Launchpool’s unique approach. It’s a great way to invest in vetted projects and we thought Swarm Markets would be at home alongside LP’s other AMEs. And for us it’s a great way to get the SMT token out to a great community with a wide range of minded crypto investors.
Timo: Yes, we subscribe to the fair launch model and know the team since many years. The Launchpool community is very active and we think it is a great fit for both parties. As part of our fairness model, we have chosen to not allocate any tokens towards the team. Also, all token purchasers will have the same vesting schedule.
A glowing recommendation for Launchpool — thanks guys!
What is the total allocation you’ve set aside for the Launchpool community? Are there any limitations or is the Allocation Mining Event open to everyone? Please list any countries that are excluded from the AME due to regulatory reasons.
Timo: The Launchpool community has 5 million SMT ($500K) allocated just for them.
Philipp: Everyone who is eligible to onboard to Launchpool can participate in the SMT AME. Launchpool has a diligent and credible onboarding process that is compatible with our policies.
Timo: Our platform does have some country restrictions which you can look up here: https://docs.swarm.markets/getting-started/faq#limitations
LPOOLers should be able to get a good sized allocation then.
What happens after the AME? Could you talk us through the tokenomics: total supply, initial circulating supply, initial market cap, initial vesting, total vesting period (from launch until when will the last token be vested for), etc.
- 250 million SMT in fixed total supply
- No pre-mined team allocation
- Initial circulating supply is 10.3M SMT
- Initial Market Cap on Launch $1.03M
- Launch pool price: $0.10
- Vesting Schedule: 20% on TGE, then 20% per quarter. 12 Months in total.
- TGE is 1 Aug 2021
- SMT is an ERC20 payment token
Philipp: After the Launchpool AME, we will have a batch auction for SMT tokens. The purpose of this auction is to establish a market price for the token prior to listings. The floor price for the auction is $0.10. This will lead towards the TGE on Aug 1st 2021. At this point 20% of tokens sold will be distributed.
Please could you elaborate on the use cases for the token? I know there are rewards models in place etc. And do you have any mechanisms planned to support the DeFi component (staking, burning, earning, spending, etc?)
Timo: The token is a payment token. The technical benefit for us is that it facilitates simplified transactions and makes the whole platform easier and cheaper to operate.
Philipp: SMT has two main advantages for token holders: You can earn money and save money.
1/ Liquidity providers get weekly rewards in SMT and there are additional loyalty rewards for those that hold SMT in the very same wallet they use on the platform. The higher the ratio of SMT to assets staked on the platform, the more you get each week.
2/ Traders get a discount when they pay the protocol fees in SMT, which cuts our protocol fees down even further by 50%.
Amazing — thanks for the added info. Before we open up to LPOOLer questions, where can we join your community? (twitter/telegram/discord/etc)
- Telegram: https://t.me/SMTtokensale
- Twitter: https://twitter.com/SwarmMarkets
- Medium: https://medium.com/@swarmmarkets
Thank you both! That concludes the pre-prepared questions. If you wouldn’t mind sticking around to answer any questions from the community 💭
Questions from the Launchpool Community
What are the requirements for a token to be listed on Swarm Markets? Does issuing through the Swarm app (SRC20) give an issuer a better opportunity to be listed on Swarm Markets?
Philipp: SRC20 is a good basis to be compatible with Swarm Markets, but not the only one. In terms of listing, as described we will start with assets that specifically designed for trading and then subsequently open to other issuers.
What was the thinking behind using a batch auction, after the Launchpool AME?
Timo: This is an unbiased way of discovering a price for the token.
Does swarm have a listing date?
Philipp: We are in the process to get SMT listed on CEXs. It will also be on DEXs like Uniswap etc. It will be possible to swap SMT in pools together with BTC, ETH, and DAI on the Swarm Markets platform. Swarm Markets has an interest in making SMT tradable for as many people as possible, so we are also talking to some CeFi exchanges to get SMT listed there too. We will give updates as soon as those listings are finalised.
Timo: Swarm Markets does not enforce any trading restrictions on SMT outside our platform. That means anyone with SMT is free to create a pool on Uniswap or some other DEX and make a market.
Will a trader using Swarm Markets platform be allowed to link any whitelisted/verified ERC20 wallet to the platform?
Philipp: Yes, whereas limited to work via MetaMask at the beginning. More coming subsequently.
Timo: And you can connect Ledger to MM
Philipp: So use your Ledger via MetaMask or your institutional custody via MetaMask and you’re good to go.
How much of an advantage do you think it is that Swarm Markets is regulated out of Germany? How hard was this to do & how much further along do you think this puts you guys?
Philipp: This is an overnight success, 2 years in the making… not as easy as it sounds. The benefit of Germany is that it is the first larger jurisdiction going this path.
Timo: We are fortunate to be located in a pioneering regulatory jurisdiction. Germany’s regulator, BaFin, has provided clear pathways for compliant handling of crypto instruments. Not easy or quick, but clear. We hope they become a model for other regulators. We had to hit certain calendar milestones in the past and if you did not hit those milestones and apply for a license today, it’s very different time frame you are looking at.
We are going to have to conclude it there. Thank you to everyone who asked a question & to the Swarm team for joining! If you have any further questions for Swarm Markets head over to their social channels.
About Swarm Markets
Swarm Markets is the world’s first licensed Decentralised Finance (DeFi) platform that combines the convenience and transparency of DeFi with the confidence of financial market compliance. Licensed in Germany and serving global users — retail and institutions alike.
Launchpool ($LPOOL) leverages communities, knowledge, expertise, contacts and capital to provide crypto projects with the best possible start to life, maximising their chances for success in this fast moving & dynamic space.