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Swarm Markets’ Polygon implementation to provide low cost DeFi access for investors


Swarm Markets GmbH, the first licensed decentralised finance (DeFi) platform, has made its decentralised exchange (DEX) available on the Polygon Network. Trading on Polygon is a lower-cost option for users of the BaFin-regulated DEX and its existing Ethereum-based products.

Swarm Markets is the first licensed automated market maker (AMM) protocol available on the layer 2 solution.

The Polygon implementation effectively removes network fees from consideration for users because it costs just a few cents per transaction, as opposed to Ethereum fees, which regularly top $100 per transaction. Transacting on Polygon will allow investors to swap in and out of positions more actively to better respond to market volatility.

Why is this important?

Swarm Markets joins an industry trend to offer alternatives to Ethereum’s rising network fee, alongside DEX Uniswap, NFT platform OpenSea, and metaverse market leader Decentraland who all added support for layer 2 solutions within the last year.

Philipp Pieper, co-founder of Swarm Markets, said: “Access to DeFi needs to be at a price point that isn’t cost prohibitive to Main Street investors, which is why expanding our licensed AMM to layer 2 solutions is crucial. Web3 is coming for financial markets and we’re building trustless infrastructure that gives people autonomy to build wealth while retaining control of their assets at all times.”

Swarm Markets’ native token SMT has already been ported to the Polygon blockchain, extending the DeFi platform’s incentive and reward system onto the new chain. Users will get discounts on platform fees if they pay with SMT as well as earn rewards for trading and providing liquidity to swap pools.

Polygon to add its MATIC to Swarm Markets

MATIC, Polygon’s native token, is among the new assets added to Swarm Markets along with a MATIC faucet, where verified users will receive a one-time transfer of enough MATIC to pay for 5-6 transactions directly from Swarm Markets. A blockchain bridge within the platform UI will help investors move assets seamlessly from Ethereum to Polygon to take advantage of the low-fee pools.

“DeFi promises to drive innovation that simply isn’t possible in traditional finance, bring services to the unbanked and give regular people access to wealth management tools currently only available to elite institutions,” said Sandeep Naiwal, Polygon’s co-founder. He added, “As part of that mission, we are very excited to support Swarm Markets in their scaling efforts.”

Swarm Markets’ newly announced SX1411 token standard is also compatible with Polygon, along with other EVM-compatible blockchains. SX1411 is a highly adaptable framework for managing asset tokens. The new standard allows Swarm Markets to support tokens backed by underlying assets whether “off-chain,” such as certain regulated securities, or “on-chain,” like NFTs.

Timo Lehes, co-founder of Swarm Markets, said: “We’re creating infrastructure, products and services that preserve the innovation of DeFi combined with the reassurance of regulation. We are driving growth of the entire DeFi ecosystem by implementing low-fee layer 2 solutions and bringing traditional financial products on-chain, like securities, to better serve consumers.”

Last month, Swarm Markets announced a partnership with German bank Volksbank Mittweida to digitise bonds on the Polygon blockchain. The registered bonds are some of the first regulated securities to be issued on Polygon.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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