- Liquid staking tokens available on a single chain, Polygon
- Commitment from financial institutions, including new crypto fund MetaLink Capital
Berlin-based Swarm, the regulated multi-asset DeFi platform, today announces the launch of institutional-grade liquid staking tokens that can integrate into DeFi automated market maker (AMM) pools, to generate additional yield in a protected environment. Liquid staking tokens for Solana Network’s native token SOL are the first to be made available, with Eth 2.0, DOT and AVAX to follow.
In the past 12 months, annualized staking rewards have grown to $15 billion cash usa loans, according to Staked’s State of Staking Q1 2022 report. The industry is fast becoming a source of passive income with average staking yields at 15.4% in Q1 2022, up 11% compared to Q4 2021.
By using the liquid staking token structure on Swarm, an investor is exposed to the value of the underlying asset, can earn yield from validator fees and trade in and out of their position at any time, instead of having assets idling.
The tokens can then earn additional yield by staking them in compliant DeFi pools on Swarm Markets, where liquidity providers receive trading fees proportional to their share of the pool. Additional loyalty rewards are available by holding Swarm’s native payment token, SMT.
Phlipp Pieper, co-founder of Swarm, said: “Staking is the new mining as ESG is stimulating investor interest in proof-of-stake networks. We’re making it easier for people to have a tradable position on their staked assets, giving institutions an entry point in the price discovery process for proof-of-stake networks.”
Private investors and funds managing more than $100 million in AUM have made a commitment to support the new tokens, including new crypto fund MetaLink Capital that aims to help people access cross chain liquidity.
Toby Lewis, Director at MetaLink, said: “We are interested in liquid staking because we can take a position across a variety of Layer 1 Blockchains with 24/7 risk management, giving us the ability to react instantly to market moves. Due to the self-custody nature of DeFi, we will have complete control over our positions and assets at all times. We are keen to use Swarm’s infrastructure to get access to more complex strategies on emerging different layer 1s like Solana.”
Liquid staking tokens are issued on a single chain, starting with Polygon, making it simple to invest across a variety of layer 1 networks using just USDC, removing operational complexity. All users on Swarm must undergo institutional-grade know your business (KYB), know-your-customer (KYC) and anti-money laundering (AML) checks, removing counterparty risk. In time, multiple tokens can be packaged together to produce a staking index product with an ISIN number.
Timo Lehes, co-founder of Swarm, said: “Our infrastructure hacks trustlessness. By removing counterparty risk, institutional capital can finally move into these products to earn high yield and loyalty rewards in a low-yield paradigm.”
One of the first liquidity pools available on Swarm will comprise liquid SOL and DAI, the stablecoin generated by the Maker Protocol, which is the largest DeFi protocol by total value locked (TVL). Swarm is partnering with custodians of staked assets. Swarm will add more PoS networks in the near future.
Notes to editors
- Staking is a way of committing your assets to secure and improve the efficiency of a decentralized network and earn a fee for doing so. Proof-of-stake blockchains require transactions to be validated. A node operator receives a fee for validating transactions.
- Liquid staking tokenizes delegated assets in a validator node. On Swarm you will have an institutional-grade token, enabling you to trade in and out of your position. For more information, visit our website: https://swarm.com/products/liquid-staking/
- The Swarm platform located in Germany allows trading of crypto currencies, security tokens and utility tokens. Read more about our licenses and regulatory status here.
About Swarm Markets
Berlin-based Swarm provides compliant multi-asset DeFi infrastructure for both institutional and retail investors. For the first time, financial products like stocks can be digitized and traded alongside crypto on one unified platform, connecting TradFi with DeFi. Its co-founders have been engaged in crypto since 2016 and initiated the non-profit DAO Swarm Network. Crypto traders can transact with verified counterparties, earn rewards by providing liquidity and find liquidity for tokenized assets in one unified environment. For more information, visit the website and Medium page.
MetaLink Capital is a premier digital assets investment firm, recently launched in Gibraltar. Set up by the team that created respected UK analytics group, Novum Insights, the fund leverages Novum research to provide its clients with a risk-balanced exposure to the $3 trillion digital asset industry, with a particular focus on decentralised finance and emerging protocols.