Decentralised over-the-counter trading
Swarm’s decentralized over-the-counter trading (dOTC) service enables institutions to carry out large transactions on the Blockchain.
High-volume swap activity is increasing significantly. Large volume-based trading OTC for digitized assets is costly, complex and often difficult to execute. Our dOTC service empowers institutions and retail investors to use a block-trade smart contract in place traditional OTC trading.
The peer-to-peer (P2P) contract will facilitate high-value transactions, reduce slippage and remove counterparty risk, as all users on Swarm are verified.
Despite high value trades being on the rise, to date, there has not been an institutional-grade trading tool available.
Swarm clients place a buy or sell order into the market for eligible assets, using the dOTC contract. Much like an escrow account, assets held by the smart contract can only be redeemed to a crypto wallet once all terms have been fulfilled.
The smart contract replaces the need for financial intermediaries, typically found in complex and costly OTC trading arrangements in traditional financial markets.
In order to use dOTC you must be qualified on Swarm, including know-your-customer (KYC) and anti-money laundering (AML) checks.
This is the first crypto block-trade smart contract from a regulated entity that institutions and professional investors can use in place of traditional over-the-counter (OTC) trading, which disintermediates trading.
Our offering includes additional unique features such as:
Partial orders - dOTC supports partial or all-or-nothing type orders, configurable by the maker.
Private offers - Makers can specify the taker address that the order is intended for. Only that address can execute on the order.
Offer expiration - Makers can specify whether their offer stays live in the market indefinitely or automatically expires at a future date.
- 1.Click the ‘Create Offer’ button to initiate your offer.a. Select the asset you want to offer (sell) and enter the amount you would like to sell.b. Select the asset you would like to receive (buy) and enter the amount you would like to receive. This establishes the price you are selling at. You may also enter a price directly in the “Your price” box. The current ‘Best Price’ (if there is one for your offer paid) will be displayed for informational purposes.c. (Advanced) - Optionally, select from the advanced options to further customize your offer:-Partial orders: Enabled by default, this allows the maker to indicate whether the offer can be purchased in partial amounts (partial orders enabled), or only in a single order (partial orders disabled)-Private offer-Expiration
- 2.The smart contract holds assets in escrow, awaiting execution by a taker.
- 3.Taker sends the required funds to the contract, which releases the purchased assets into their wallet.
Fees for dOTC trading are 0.3% and are paid by the Maker only in the case of an offer being successfully taken. Canceled offers are not subject to any fees.
When making an offer, the Maker enters a price and is provided a quote for the expected amount of asset they would receive if the offer is taken, less the 0.3% fee.
Discounts for paying fees in SMT will be introduced in future upgrades to the service.
dOTC simplifies one of the most complex areas of crypto OTC trading for large block trades.
dOTC enables contract-based block trades for both crypto and upcoming regulated digital securities, with verified counterparties, extending cost and time savings available to high volume traders.
At launch, the dOTC system will support authorized ERC20 assets only.
In future, the dOTC contract will be used for a wide range of digital assets, from ERC20 to ERC721/1155, enabling participants to trade high value NFTs and to facilitate smoother liquidation of crypto positions. We will announce new eligible assets for dOTC trading as we add them.
There are no minimum order sizes required on dOTC.