The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended or with any other regulatory authority of any State or other jurisdiction of the United States or Canada and (i) may not be offered, sold or delivered within the United States or Canada, or to, or for the account or benefit of any U.S. Person or Canadian, and (ii) may be offered, sold or otherwise delivered at any time only to transferees that are Non-United States Persons and Non-Canadians.

May 23, 2022

COVID NFTs, Repo market, ENS

Welcome to Swarm Markets’ media memo. This weekly update provides comments from Swarm Markets’ co-founders, Philipp Pieper and Timo Lehes, on key industry news that has caught our eye, plus our own developments. 

Comments available on the following news items:

  • Chicago to let vaccinated teens mint NFTs of themselves
  • Banks turn to blockchain in search for high-quality trading assets
  • Interest in Ethereum Name Service reaching ‘critical mass’

Chicago to let vaccinated teens mint NFTs of themselves as part of COVID-19 prevention effort

In yet another step forward for the NFT space, US city Chicago is giving teenagers the opportunity to mint portraits of themselves into NFTs. Designed as a reward for receiving the Covid-19 vaccination, US teenagers can either keep their NFT or sell it on the secondary market. 

While we have heard extensively of NFTs being used as investment assets, or to join online communities, the use of the NFTs to encourage public health initiatives indicates the flexibility and wide-ranging use-cases for the technology. 

NFTs will be more than just digital art. In fact, we feel that NFTs and Distributed Ledger Technology will be the intersector between finance and culture. A place where, for example, collectors can amass libraries of work or display their own style and personality in online communities, or where educators can display intellectual property and patents, or where medical professionals can store health records, all through decentralised marketplaces and platforms.

Banks turn to blockchain in search for high-quality trading assets

The Financial Times has reported that two major financial institutions, BNP Paribas and JPMorgan, are using blockchain technology for intraday trading in the $12 trillion fixed-income market.

BNP has joined JPMorgan’s blockchain platform to tokenize assets in the repurchase (repo) market. The platform allows banks to lend out US government bonds for a few hours as collateral, without the bonds leaving their balance sheets. JPMorgan’s platform has already been used for $300bn of trades since launch in December 2021 and in this instance, uses smart contracts to determine the length and and settlement time of the loan.

While some financial firms are quick to bemoan the volatile nature of crypto as an investment asset, many are turning to blockchain technology to make trading practices more efficient. In a world where financial markets need to be as quick and nimble as possible, blockchain technology can help speed up trading and enable users to do more with the collateral on their balance sheets at a time when traditional markets are in a low-yield paradigm.

Explosion of interest in Ethereum Name Service 

The lead developer on the Ethereum Name Service (ENS), Nick Johnson, tweeted this weekend that May has already been the busiest month for the service, despite still having one week left to run. 

The service allows users to assign a name to their Ethereum wallet and can be seen as a proxy for how popular communities are becoming on the Ethereum platform. Data from ENS shows that there have already been 304,000 name registrations in May, with low gas fees also a contributing factor to the monumental month on month uptick. 

The fact that people are increasingly keen to connect an identity to their personal wallet shows that anonymity, while initially being a major driver and pull towards crypto, may be seeing a waning influence. In our view this actually strengthens the case for further regulation in the sector, given that a reduction in anonymity might not necessarily be seen as a detractor for further adoption. 

We believe that as the apps, services and communities on Ethereum increase, users will more and more wish to develop a personal identity on the platform with which they can interact with other members. With DeFi already a key component of any Ethereum usage, we see this as a positive step for both the DeFi sector and the wider crypto community as a whole.