Swarm's alternative STO pricing model may be just what securities need

A new pricing model launched by Swarm may revolutionise the world of security token offerings, Business Insider writes. Up until now, the issuers were required to pay hefty fees to be able to launch their STOs; however, Swarm’s new model eliminates up-front fees, believing they might have contributed to the low number of securities issued last year.

Instead, Swarm proposes the issuer of the STO to set up a funding goal for the new securities to be issued. After reaching the funding goal, the issuer gets a stake of between 0.5 per cent and 1 per cent in Swarm’s utility token, thus supporting the technology and the ecosystem.


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"Pushing the value transfer into the transfer/transaction of digital securities pushes us to access and liquidity for everyone faster, and sets the stage for everyone in the ecosystem to be incentivized to deliver value," said Chris Eberle, COO at Swarm.

The company has already tested its newest model—it successfully issued TheArtToken, a digital security backed by a portfolio of art, which raised over $16 million in funding.

Besides providing a way to sell assets that are difficult to trade, the new model could offer a funding alternative for startups that for some reason decide against traditional funding methods.

More by Carol Gaszcz