From the outset, our goal has been to create a seamless connection between traditional financial assets and the blockchain.
With Swarm, investors — both retail and institutional — can seamlessly access tokenized stocks and bond ETFs on-chain, all within a compliant framework. We’ve established both a permissioned infrastructure requiring KYC and a permissionless environment, providing DeFi users with the ability to trade traditional financial assets on-chain.
Swarm’s native token, SMT, operates as a payment token based on the ERC20 protocol on the Ethereum blockchain. Designed to streamline transactions, SMT also offers discount and reward incentives for the Swarm platform. Its value correlates strongly with the adoption of tokenized RWAs.
This article dives into the different methods users can earn SMT rewards and increase their exposure to the asset.
Summary:
- Liquidity Provider (LP) Rewards: Users can earn SMT rewards by becoming liquidity providers on app.swarm.com.
- Staking Rewards: Swarm offers a dedicated staking platform where users can stake SMT against tokenized RWAs and earn rewards.
- RWA Holder Rewards: $SMT holders are incentivised to hold tokenized RWAs in their crypto wallets. Rewards for RWA holders are determined by each address’s USD-equivalent holdings of RWAs issued on the Swarm protocol, proportionally against the total market cap of all RWAs.
- Loyalty Rewards: In addition to the three methods for earning rewards, Swarm provides an opportunity to boost rewards through different loyalty levels.
Before diving into the different methods of earning rewards, let’s first understand the distribution of weekly rewards. Note that new rewards are unlocked as new TVL thresholds are reached:
- 0-$10M — 25%
- $10M-$100M (25%)
- $100M-$1Bn (25%)
- +$1B (25%)
Any unallocated rewards will be burned weekly, thereby reducing the total circulating supply. Check the homepage of the Swarm website to find out which threshold $SMT rewards are currently at.
- Become a Liquidity Provider
One way to earn SMT rewards involves becoming a liquidity provider (LP) on app.swarm.com, our permissioned platform application.
This app operates on the Automated Market Maker (AMM) principle, employing smart contracts to establish liquidity pools of ERC20 tokens. Trades occur automatically via algorithms rather than through an order book, allowing assets to be exchanged at the pool’s current price, thus replacing the traditional limit order book system.
Swarm offers AMM pools comprising both cryptocurrencies and tokenized assets, such as stocks from Blackrock, Microsoft, Nvidia, and Apple, alongside short-term US bond ETFs.
After completing the KYC process, users can participate as LPs by depositing their available tokens into the pool. This enables traders to exchange assets with the pool. LPs receive SPT tokens, representing their ownership share of the pool.
Below is an image illustrating the screen where you can access Swarm’s liquidity pools:
- Connect your wallet and complete KYC;
- Select the pool in which you wish to provide liquidity;
- Deposit your tokens.
Here are some key details regarding rewards:
- SPT balance is calculated per address and per network, then prorated by total liquidity on the platform.
- Addresses with liquidity on multiple networks are calculated separately.
- Individual user rewards are capped at 500% APY for up to $10M platform liquidity, and 250% for $10M-100M. There is no cap thereafter.
- Pools with RWAs (stocks, bonds, and commodities) receive a 4x rewards boost compared to other pools.
2. Staking Rewards
$SMT holders can lock up their tokens by staking against tokenized RWAs on a dedicated platform that are issued within the Swarm protocol.
Staking rewards are determined by the amount of $SMT staked against a particular RWA within each wallet address. This calculation utilizes the asset’s TVL relative to the total asset’s market cap, proportionally distributed across all $SMT stakes associated with the specific security asset.
To participate in staking, simply follow these steps:
1. Visit https://smt.swarm.com/staking;
2. Connect your wallet;
3. Choose the RWA you wish to stake against by clicking “Stake SMT”;
4. You’re all set! Rewards will begin accruing after a 7-day warm-up period.
Staked tokens can be unstaked at any time.
3. RWA Holder Rewards
$SMT holders are incentivised to hold tokenized RWAs in their crypto wallets. Swarm has tokenized publicly-traded stocks, like Tesla and Microstrategy, plus bond ETFs and a full list can be found on our product page.
Rewards for RWA holders are determined by each address’s USD-equivalent holdings of RWAs issued on the Swarm protocol, proportionally against the total market cap of all RWAs.
4. Loyalty Rewards
In addition to the three methods for earning rewards, Swarm provides an opportunity to boost rewards through different levels. Here are the details:
- Loyalty rewards are determined by the ratio of $SMT held to the total asset value staked in liquidity pools.
- Loyalty level is calculated separately for each address and network, without aggregation across networks.
- $SMT balance encompasses holdings in trading wallets, unclaimed SMT rewards, and contributions to Swarm Markets liquidity pools.
- A boost factor is applied to LP Reward participation.
About $SMT
- You can buy and exchange $SMT on Uniswap (Ethereum and Polygon), MEXC, Gate.io, (under the ticker $SMTX,), BingX, the Swarm platform and Open dOTC.
- For tokenomics and distribution, visit the $SMT docs page.
- Visit CoinGecko for up-to-date $SMT stats and figures.
- Join the conversation on X and Telegram.
- For total circulating supply figures, use our API.
