"We tend to see more volatility in the crypto markets in the months of December and January, resulting in high slippage for larger trades."
Swarm Markets, a Berlin-based regulated decentralized financial infrastructure provider, will launch a peer-to-peer contract for high-value transactions in the first quarter of 2022, the firm announced.
The move could draw the attention of institutions and professional investors, as the so-called dOTC service allows them to use a regulated cryptocurrency block trading smart contract for over-the-counter (OTC) trading.
Cryptocurrency volatility is highest in December and January
The use of decentralized technology is expected to reduce costs and increase the speed of execution for market participants at a time when high-volume exchange activity increases significantly.
Last year, the number of unique traders executing trades over $ 500k increased by 140% from March to September 2021, according to a Messari Hub report.
Timo Lehes, Co-Founder of Swarm Markets, said: โBecause Swarm Markets is regulated to the same degree as any other German financial institution, dOTC users can rely on our infrastructure for block trading with only verified counterparties. For the first time, institutions with fiduciary responsibility now have a compatible trading tool that they can use to minimize or eliminate cryptocurrency slippage.
โFundamentally, our business infrastructure preserves DeFi architecture and innovation with the peace of mind of regulation. dOTC preserves elements such as self-custody, so participants have control over their assets at all times โ.
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Available from ERC20 to ERC721 / 1155, including NFT
Phlipp Pieper, Co-Founder of Swarm Markets, added: โThe timing of this announcement is crucial as institutions have very few, if any, viable and reliable trading tools in DeFi to help overcome crypto volatility. We tend to see more volatility in the crypto markets in the months of December and January, resulting in high slippage for larger trades.
โSwarm Markets is uniquely positioned to offer a decentralized trading infrastructure in both cryptocurrencies and traditional financial products. This contract will become a key feature for institutions to support the buying and wholesale of on-chain securities, using the Swarm Markets DeFi infrastructure, which will be launched in the first quarter of 2022. "
By eliminating the need for intermediaries, Swarm Markets' dOTC smart contract enables platform users to securely execute a buy or sell order directly with other platform users in minutes instead of days or weeks, and for a small fraction of the price, the firm explained, adding that the contract can be used for a wide range of digital assets, from ERC20 to ERC721 / 1155.
High-value NFTs are included in the equation as that market segment is finding adoption. The service also facilitates the smoother settlement of crypto positions and enables contract-based block exchanges for upcoming regulated digital securities.
