FAQ

Hot FAQs

How do I setup an ERC20 compatible wallet?

To store tokens built on the Ethereum blockchain, including SWM, you will need an ERC20 compatible wallet. If you are new to crypto, know that this is different from a wallet you might use to hold ETH, such as your Coinbase wallet.

There are a number of different options for ERC20 wallets, and we don't endorse one over the others. For the purpose of this FAQ we'll explain how to setup with myetherwallet.com (MEW) but here are a couple other options to consider:

 

Setup Instructions for MyEtherWallet:

2. Enter a password of your preference
3. Download your Keystore file on your computer
4. Save Your Private Key + Print your paper wallet
5. Unlock your wallet using your "Keystore File (UTC / JSON)" and your password to see your address
6. Note the wallet address, starting with 0x****
7. Store your paper wallet in a safe place and don’t lose it…!
 
You can also check out this video we made on 'participating in your first ICO' that covers this setup process and some other crypto fundamentals.
 
See further FAQ for how to add SWM to your wallet and how to check your liquid token balance.
How do I add the SWM token to MyEtherWallet?
To add a token to MyEtherWallet, you need to fill in this address: 0x9e88613418cf03dca54d6a2cf6ad934a78c7a17a ; token name = SWM ; digits = 18
How do I check the amount of liquid tokens in my wallet?

Now that the Liquidity release is executed here’s how you can check the amount of liquidity tokens for each wallet.

Go to https://www.myetherwallet.com/#contracts
Enter the contract address of the token contract [0x9e88613418cf03dca54d6a2cf6ad934a78c7a17a]
Enter the ABI (Below)
Choose “vestedBalanceOf”
Enter the address you want to check.
Click Read
Note: Units will be in base units. So you’ll have to go to https://etherconverter.online/ to convert into proper ETH. Paste the balance into the 'Wei' field and your vested balance will show in the 'Ether' field.

ABI to copy:

[
{
"constant": true,
"inputs": [],
"name": "mintingFinished",
"outputs": [
{
"name": "",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "name",
"outputs": [
{
"name": "",
"type": "string"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_spender",
"type": "address"
},
{
"name": "_amount",
"type": "uint256"
}
],
"name": "approve",
"outputs": [
{
"name": "success",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [
{
"name": "_owner",
"type": "address"
}
],
"name": "vestedBalanceOf",
"outputs": [
{
"name": "balance",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "creationBlock",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "totalSupply",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_from",
"type": "address"
},
{
"name": "_to",
"type": "address"
},
{
"name": "_value",
"type": "uint256"
}
],
"name": "transferFrom",
"outputs": [
{
"name": "success",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [
{
"name": "_vestingStartTime",
"type": "uint256"
},
{
"name": "_currentTime",
"type": "uint256"
}
],
"name": "getVestingPeriodsCompleted",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_vestingStartTime",
"type": "uint256"
},
{
"name": "_vestingTotalPeriods",
"type": "uint256"
},
{
"name": "_vestingPeriodTime",
"type": "uint256"
}
],
"name": "setVestingParams",
"outputs": [],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "decimals",
"outputs": [
{
"name": "",
"type": "uint8"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_newController",
"type": "address"
}
],
"name": "changeController",
"outputs": [],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_to",
"type": "address"
},
{
"name": "_amount",
"type": "uint256"
}
],
"name": "mint",
"outputs": [
{
"name": "",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [
{
"name": "_owner",
"type": "address"
},
{
"name": "_blockNumber",
"type": "uint256"
}
],
"name": "balanceOfAt",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "version",
"outputs": [
{
"name": "",
"type": "string"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_cloneTokenName",
"type": "string"
},
{
"name": "_cloneDecimalUnits",
"type": "uint8"
},
{
"name": "_cloneTokenSymbol",
"type": "string"
},
{
"name": "_snapshotBlock",
"type": "uint256"
},
{
"name": "_transfersEnabled",
"type": "bool"
}
],
"name": "createCloneToken",
"outputs": [
{
"name": "",
"type": "address"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [
{
"name": "_owner",
"type": "address"
}
],
"name": "balanceOf",
"outputs": [
{
"name": "balance",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [],
"name": "finishMinting",
"outputs": [
{
"name": "",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "parentToken",
"outputs": [
{
"name": "",
"type": "address"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_owner",
"type": "address"
},
{
"name": "_amount",
"type": "uint256"
}
],
"name": "generateTokens",
"outputs": [
{
"name": "",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "vestingTotalPeriods",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [
{
"name": "_initialBalance",
"type": "uint256"
},
{
"name": "_currentBalance",
"type": "uint256"
},
{
"name": "_vestingStartTime",
"type": "uint256"
},
{
"name": "_currentTime",
"type": "uint256"
}
],
"name": "getVestedBalance",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "symbol",
"outputs": [
{
"name": "",
"type": "string"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [
{
"name": "_blockNumber",
"type": "uint256"
}
],
"name": "totalSupplyAt",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "vestingStartTime",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_to",
"type": "address"
},
{
"name": "_value",
"type": "uint256"
}
],
"name": "transfer",
"outputs": [
{
"name": "success",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "vestingPeriodTime",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "transfersEnabled",
"outputs": [
{
"name": "",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "parentSnapShotBlock",
"outputs": [
{
"name": "",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_spender",
"type": "address"
},
{
"name": "_amount",
"type": "uint256"
},
{
"name": "_extraData",
"type": "bytes"
}
],
"name": "approveAndCall",
"outputs": [
{
"name": "success",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_owner",
"type": "address"
},
{
"name": "_amount",
"type": "uint256"
}
],
"name": "destroyTokens",
"outputs": [
{
"name": "",
"type": "bool"
}
],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [
{
"name": "_owner",
"type": "address"
},
{
"name": "_spender",
"type": "address"
}
],
"name": "allowance",
"outputs": [
{
"name": "remaining",
"type": "uint256"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_token",
"type": "address"
}
],
"name": "claimTokens",
"outputs": [],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "tokenFactory",
"outputs": [
{
"name": "",
"type": "address"
}
],
"payable": false,
"type": "function"
},
{
"constant": false,
"inputs": [
{
"name": "_transfersEnabled",
"type": "bool"
}
],
"name": "enableTransfers",
"outputs": [],
"payable": false,
"type": "function"
},
{
"constant": true,
"inputs": [],
"name": "controller",
"outputs": [
{
"name": "",
"type": "address"
}
],
"payable": false,
"type": "function"
},
{
"inputs": [
{
"name": "_tokenFactory",
"type": "address"
}
],
"payable": false,
"type": "constructor"
},
{
"payable": true,
"type": "fallback"
},
{
"anonymous": false,
"inputs": [
{
"indexed": true,
"name": "to",
"type": "address"
},
{
"indexed": false,
"name": "amount",
"type": "uint256"
}
],
"name": "Mint",
"type": "event"
},
{
"anonymous": false,
"inputs": [],
"name": "MintFinished",
"type": "event"
},
{
"anonymous": false,
"inputs": [
{
"indexed": true,
"name": "_token",
"type": "address"
},
{
"indexed": true,
"name": "_controller",
"type": "address"
},
{
"indexed": false,
"name": "_amount",
"type": "uint256"
}
],
"name": "ClaimedTokens",
"type": "event"
},
{
"anonymous": false,
"inputs": [
{
"indexed": true,
"name": "_from",
"type": "address"
},
{
"indexed": true,
"name": "_to",
"type": "address"
},
{
"indexed": false,
"name": "_amount",
"type": "uint256"
}
],
"name": "Transfer",
"type": "event"
},
{
"anonymous": false,
"inputs": [
{
"indexed": true,
"name": "_cloneToken",
"type": "address"
},
{
"indexed": false,
"name": "_snapshotBlock",
"type": "uint256"
}
],
"name": "NewCloneToken",
"type": "event"
},
{
"anonymous": false,
"inputs": [
{
"indexed": true,
"name": "_owner",
"type": "address"
},
{
"indexed": true,
"name": "_spender",
"type": "address"
},
{
"indexed": false,
"name": "_amount",
"type": "uint256"
}
],
"name": "Approval",
"type": "event"
}
]

Can I use SWARM with my local wallet instead of the hosted one built into the website?

Yes, the smart contract implementation supports local usage and participation through Mist or another ERC20 wallet.

Why do I see two SWM transactions in my wallet?

The reason you may see two transactions is because there were two contracts deployed. One deployment failed due to the wallet deploying the contract running out of gas. Payouts of pre-allocations did go out until the wallet ran out of gas and so preallocation holders may see two transactions on their blockchain explorer.

The failed crowdsale contract can be viewed here: https://etherscan.io/txs?a=0x046418d5d8ec0fbf111f901bf34d331eee2aeaab

The successfully deployed crowdsale contract can be found here:https://etherscan.io/address/0x3b13f20cb484a87d4613b0ffe2d934d9c70cccfd

In order to add the token contract to Metamask click the tokens tab in your Metamask wallet.

Then click 'Add Token'.

For the Token Address enter the Swarm (SWM) token address: https://etherscan.io/address/0x9e88613418cf03dca54d6a2cf6ad934a78c7a17a

Enter SWM for the token symbol and click 'Add'. Decimals of precision: 18.

Can I send ETH directly from exchanges?
Do NOT send from exchanges. Make sure you use your own wallet and make sure you own the private key to the wallet.
Can I invest in Swarm Fund from anywhere in the world?

Swarm Fund welcomes investors from anywhere as long as they are complying by their local rules and regulations. U.S. residents must qualify as accredited investors, either by self-accreditation and investing more than $100K in value or by qualifying via www.verifyinvestor.com.

What is the difference between regular crowdfunding platforms and Swarm Fund?

No middleman: in Swarm’s case the investor has a direct ownership of the SUN tokens released on the opportunity.
Other asset classes: crowd-sourcing platforms are normally targeted to venture investments, to-be-launched products highly verticalized or territorially limited. Swarm is available on a broader basis.

When will my SWM tokens be liquid?

Swarm Fund uses a drip liquidity release method. Investors will be able to vote on the liquidity parameters between October 30 14:00 UTC and November 6 23:00 UTC. The liquidity parameters will be selected from a fixed set, such as:
Days per period: 21, 42, 63 or 84
Number of periods: 4, 8, 12 or 16

On which exchanges will SWM tokens be traded?

The exchanges on which you will be able to trade SWM tokens will be announced shortly after the token sale has ended.

When will my SWM tokens be visible in my wallet?

If you purchase during:
1st Presale (ended on Sept 5)
1st Token Sale (Day of Sept 7)
You can see your tokens in locked form, as of Sept 7.
If you purchase during:
Continued Presale (Sept 8 - Oct 18)
You will see your tokens in locked form, on Oct 21, at beginning of Token Sale.
If you purchase during the 2nd Token Sale (Oct 21 - Oct 27)

You will see your tokens in locked form, at the time of purchase. On Nov 6th - Your First Portion of Tokens are Liquid. The portion, originally 1/8th, will be newly determined by the Voting Period.

About Swarm Fund

Where does the name “Swarm” come from?

“Swarm Intelligence” is a scientific field that arose from the study of self-organizing biological systems. Many species make heavy usage of multi-track systems to incentivize socially positive behavior. This allows complex life to develop and evolve in a dynamic fashion. In many ways, this is similar to the mathematics behind fractals. This formalization of rules happens at the level of harmonic principles, rather than at the specific structural level, as often happens with hierarchical organizations.

What does it mean to be involved in Swarm Fund?

Swarm Fund attempts to apply this concept (formally known as “stigmergy”) to finance through blockchain technology. In particular, reputation plays a key role as different system behavior is tracked and positive behavior is incentivized. Consequently, the greater the trust and transparency and effectiveness of the underlying system, the less formal command and control methods are needed and the more finance can be fully automated. Although we started entirely internally to the blockchain community, this ostensibly applies to all asset types.

What is the history of Swarm Fund?

Swarm Fund was inspired by the idea that smart contracts could lead to greater trust, transparency, and access in finance. It initially launched as a membership network dedicated to this purpose in the summer of 2014 and ran a successful $1mm blockchain crowdfunding campaign that was the first of its kind.
After launching a “Silicon Valley” style incubator house it also helped develop, fund, and launch several projects, including Bitcoin Comic book, Woodshares (the first dedicated crypto-asset fund), and several other projects that remain in stealth mode.
Additionally, the founders realized many of the barriers to creation on this space were regulatory and worked primarily on governance and organizational design, including speaking at various industry events, including partnerships with Singularity University, Agentic Group, and ExO Works.
After key learnings from these engagements we began implementing the most advanced blockchain governance system developed to date, which integrated concepts of liquid democracy, futarchy, and reputational systems.

What are some of the project use cases that you hope to fund with this approach?
We are currently focused on hard assets that have mostly been neglected within the crypto-asset world, especially unique financial assets that would highly benefit from automation. For example, we are looking at real estate, distressed real estate, art, and SaaS platforms. All of these highly lend themselves to tokenization. That said, we believe that all types of investment are highly likely to benefit from a reputation-based model.
How will the Swarm network be governed?

The Swarm network uses a stake-weighted liquid democracy system for governance, of which stake is gradually sold off to interested parties. This implementation is described in detail in the Whitepaper.

How will the Swarm platform make money?

The Swarm platform makes money primarily through individual deal opportunities that the network participates in. This is done through what is traditionally called a “carry,” a distribution of realized return that goes to the platform. Additionally at some points we may charge a fee for project listing.

What is the current status of your infrastructure?

Our MVP is a stake-weighted liquid democracy organization deployed via Solidity smart contracts. It allows for putting forward proposals and dynamic allocation of capital to causes or sub-projects. Additionally, stake can be bought. The smart contracts are open source and can be viewed here.

Who is on your team?

Our core team is largely comprised of entrepreneurs who have gone into finance after a couple of successful tech companies. Joel Dietz was an early MVP and competitive coder in the Salesforce world before getting involved with blockchain and has been involved with multiple successful enterprise SaaS companies, including his own consulting business. Philipp Pieper has built and sold several companies, including Proximic. Timo Lehes was an engineer who after a couple of exits had gone into finance and investment banking. Our early advisors also include Mark Oei of the Sequoia Heritage fund and Jack Peterson of Augur.

How would you generally categorize your regulatory approach?

Our approach has been three-phased: first, a phase of innovation without permission focused on testing technology and related infrastructure in order to build useful and innovative applications of said technology; second, a phase of engagement with active legal scholars and practitioners to find the evolution of jurisprudence, including reporting on conclusions; third, presenting these findings to regulators and finding open areas for future innovation.

For example, our first phase of innovation was a six month period focused primarily on building and raising awareness of technology. Afterwards, we went through a six month phase of engagement including running events at Harvard, MIT, and Stanford focused on the legal issues and potential legal modes for Decentralized Autonomous Organizations. In the third phase we initiated a couple of meetings with the SEC and FCA (U.K) as well as active engagement around the broader Platform Cooperativism movement.

The combination of the second and third phase lead us to highly emphasize governance in our second major iteration and to remove the centralized and non-transparent elements which we inadvertently had introduced. This we believe will be a successful model both because of the generally aligned incentives and the ways in which these models have been historically successful (i.e. cooperatively owned banks). Additionally, even if some nation-state ultimately decides that it is not going to allow this model to operate within its borders, we believe that this will not slow the growth of this technology as it is effectively transnational by design and has sufficient benefits for the nation states or city states which adopt it.

Consequently, we anticipate following roughly these same three phases in our second major iteration with the anticipation that we will establish a firm grounding in rule of law in at least one nation state.

How do you interface with the existing corporate world?

To facilitate our own research interests and those of our corporate clients we have a standalone legal entity which engages in the production of prototypes and long-term research called Quantum Holonic Swarm Systems (Q-HOSS for short). It has a close relationship with the Institute for the Future and Singularity University and frequently hosts executive summits for leaders touring Silicon Valley who want to understand the state of the art of various technological fields. Companies we have hosted and provided services to include Walmart, H&M, Ikea, American Express, Microsoft, Intel and MunichRE.

We also have channel partnerships with Agentic Group (executive reports), eXo Works (exponential organization sprints) and a few smaller boutique firms that provide specialized services in our current topical areas, which include Blockchain, Biohacking, Deep Learning, Organizational Design, AI, and Virtual Reality.

We anticipate that this entity will be able to engage in contract work for the decentralized entity where needed. Also, we anticipate creating special purpose vehicles (SPVs) where necessary for specific purposes. These will likely be spread across multiple regulatory jurisdictions.

How much money can we make how quickly?

In certain respects we are providing similar services to an investment bank, in that we are underwriting an asset which has a high upward potential. Appropriate structuring (and high quality marketing) will lead to very significant upward appreciation as the value proposition is made available to a larger number of people. This is, among other things, why our fundraising goals at present are quite modest. We wish to make the maximum room for upward appreciation for people who are engaged at this level.

This is also in accord with our general principle of shared incentives. The founders of this project, early participants from the crowd, and current participants will all share exactly the same set of incentives. The appreciation from Ethereum over the course of this calendar year was 1002%. We will aim for something similar over the course of an 18 month period, but this will partially depend on your effort as well as our own.

What rights come with my financial contribution?

Our system is a stake-weighted liquid democracy with shared incentives for all participants. This means that you will receive pro rata voting rights in return for your contribution. This system will be used to govern all funds and all major decisions regarding the evolution of the platform. We highly recommend that all participants delegate their votes upon their entry into the system and will use the voting as the basis for in-network reputation.

The current implementation (https://liquid.qhoss.com) is provisional up until our formal launch. Fund received will be held in secure multisig wallets as we undergo a series of proofing for the full system, including code audits. After there is sufficient validation we will release the full system.

Additionally, all tokens will be locked in an escrow contract which gradually releases all of the tokens over a 12 month period from launch. This is to give a combination of short term liquidity and long term incentives to make the system successful and create the appropriate structure for upward appreciation in the base asset.

What are the key learnings from Swarm 1.0 and how is Swarm 2.0 different?

Massive learning on legal side - In addressing the regulatory issues that surfaced for Swarm 1.0, Swarm 2.0 has involved the most experienced lawyers in the crypto space to mitigate regulatory risk. One of the key improvements is the token architecture for Swarm 2.0, which is distinctly divided into a utility token (Swarm) and a security token (SUN).

Real go-to market strategy - Whereas there was a lack of clarity around Swarm 1.0 asset types, Swarm 2.0 has partnered with a number of proven funds leading up to it’s launch. Examples of asset types in Swarm 2.0 are Distressed Real Estate, Solar Energy and an Arts fund.

Frugality and operational efficiency -The Swarm 1.0 team were early visionaries within the crypto space and were lacking operational experience to build out an investment grade platform. In particular, key additions to the Swarm 2.0 core team bring a wealth of experience from both technological entrepreneurship and traditional finance, as well as the identification of unique financial assets and related opportunities. The value of funds raised for Swarm 1.0 were eroded by the decrease in Bitcoin price from $600 to $200, reducing operational capital significantly.

The market has changed - Since the launch of Swarm 1.0 the crypto currency market has matured significantly. Ethereum as a platform is significantly improved, smart contract security has evolved, the market capitalization of crypto currencies increased by a significant multiple, including the participation by mainstream financial institutions. In terms of timing Swarm 2.0 has the necessary pre-conditions to build a global market infrastructure for alternative investments, conditions that did not exist at the time of the Swarm 1.0 launch.

Who has been involved with the various iterations of Swarm?

The first pitch of the concepts in SWARM was made by Joel Dietz at a round table in Palo Alto in 2014. The two most enthusiastic attendees were Tom Ding and Jef Cavens. Tom Ding pitched the idea to Chinese venture capitalists and was independently funded through various iterations, called Koinify and now String Labs. Jef Cavens and Joel Dietz teamed up to do a “dogfooded” version of the same and were business partners for approximately six months. At the beginning of the crowdfunding campaign approximately a month later Joel’s former employer Ben Ingram came on. Both Jef and Ben had founded and grown substantial size consulting companies in the past (Jef as a design agency, Ben primarily in the enterprise software space).

Each brought on a developer they had been engaged with in the past (one front end, Pasha, and one backend, Sebastian,) as well as one community manager (Caterina), leading to an effective core team size of six. However, despite a successful first product delivery cycle from a technological standpoint, including the launch of the crowdfunding campaign for the Bitcoin comic, none of the core team were convinced they had a viable business model. This was especially true during the leadup to their second launch in November in which all of the most interesting projects were extremely regulatorily problematic.

After Techstars approached Swarm for inclusion in the London program, Jef, Ben, and Joel decided that there might be some business or other opportunities arising out of their involvement there, possibly because of the more favorable regulatory environment. Unfortunately, nothing very clearly presented itself as an alternative during the first couple weeks of the program. Also, communications were difficult given the different locations of the team members (Joel was still maintaining the Palo Alto office).

Joel, as the original founder and core decision maker, ultimately insisted on following the slow three-phased regulatory approval described elsewhere in this document, which effectively made maintaining a full development team an unnecessary expense. This ultimately lead to the phasing out of all full-time team members. Also, the regulatory advice received at the Harvard and Stanford summits included a high prioritization of the governance level, which ultimately required building on some sort of smart contract capable platform. Unfortunately no such platform existed on that market at the time and it would be approximately one year before anyone attempted to build a production decentralized application on a platform (i.e. the DAO, which itself fell victim to platform bugs). During this same phase Andrew Cook, founder of Cook Investment firm which at a certain point had over $100mm in Bitcoin under management in Chile, also came on board and began investigations and an attempt to set up a hedge fund that could invest in crypto assets. This attempt also stalled due to regulatory concerns.

In general, relationships remain warm between all of the people involved with Swarm in any capacity as well as the Techstars CEO and the Managing Director of Techstars London. The only significant interpersonal problem occurred at the end of Techstars when it was revealed that there has been some miscommunication about Swarm’s eligibility to receive the $100k that projects usually receive as part of the Techstars program. Jef Cavens had been under the understanding that the team was to receive this, and various decision-making was made on this basis, including the decision to give him an outgoing settlement when he scaled back his own involvement. This was particularly important given the sharp depreciation of Bitcoin that had happened during the initial implementation of SWARM. The ultimate result was that SWARM had a short-term cash crunch during that period that lead to a more rapid downscaling of staff than otherwise would have been the case.

During the post-Techstars phase the day-to-day governance was taken over by volunteers called ‘delegates’ or ‘agents,’ who phased in and out their involvement. Also, a large amount of focus shifted from the global focus of the initial SWARM to decentralized activities in the vicinity of their Palo Alto incubator. Among other things approximately 20 meetups were hosted and a significant collaboration went on with a product called Swarmbot which was for token-creation and distribution.

These delegates have continued to be involved until the present and are excited about the liquid-democracy based reboot plan.

What are some interesting projects straight out of the gate?

This is an elegant go-to-market option we are considering:
Swarm can scrape other portals (e.g. Angellist, Kickstarter) and then list those companies while referencing their materials on the Swarm marketplace.
Investors can then commit with their coin to a Project and if it meets the minimum demand, then Swarm as a fund approaches the company and makes an offer.
Only if that offer gets accepted will the funds actually get deployed and put into a sub-Swarm with separate governance. When the investment happens, as Swarm we have a legal entity ourselves that can become an investor with the target asset.
In the process, the entrepreneur can see that the funds are transparently committed.
After investing, Swarm will make company updates only available to those coin holders that have sufficient holdings in the assets (minimum to be defined).
This can fix the issue with current legislation around crowdfunding (JOBS act etc.), as 1. a company themselves cannot advertise their share offerings and 2. investors have to be accredited.

How can I learn more? Do you have a white paper?

Yes, our white paper, which outlines the various components that make up the network stack is available on the homepage.

Swarm Platform Mechanics

How do I acquire crypto-currency in order to invest into Swarm Fund?

Create an account on an exchange (GDax, bitfinex, Kraken, Gemini).
Verify that account. You will need to upload a wide variety of documents proving you are who you say you are. It's all regulatory mandates. Once you upload this material, verification takes a day or two, much faster than it used to be.
Follow the instructions on the exchange to deposit USD into that exchange. This, depending on your bank and the wire transfer, will typically take 3-5 business days.
Now you have USD in your exchange account and can buy ETH with it.
Once you have all the ETH you want, withdraw that ETH into a wallet that you control.
While you are waiting for your verification and transfer, download and install Mist / Ethereum Wallet. Run it so it can sync the blockchain.
We also highly recommend purchasing a Ledger Nano (https://www.ledgerwallet.com/products/12-ledger-nano-s), a hardware wallet that supports both Ethereum and Ethereum assets.
When you run it, it'll prompt you to make a new account. Create a password that you will never ever forget and create the account. Then, it'll give you an address that starts with 0x.. This is what you will enter on Kraken or Bitfinex to move your ETH from their account to your own.
To safely keep your account you have 3 pieces of information: Your address (0x....), your password, and the private key. The private key is like a password, but way more effective. Plus, it's a password that is protected by another password. In Ethereum Wallet, this private key is stored in the keystore file. You need to make a backup of this in case anything happens to your computer. In Ethereum Wallet, go to the top bar and find ACCOUNTS -> BACKUP -> ACCOUNTS. It'll open up a folder and inside you will see a file. This file is your private key. Copy this to a USB drive and safely store the USB drive in a different physical location than your computer (in case your house explodes).
Email us with your intent to buy and the quantity you wish to buy at investors@swarm.fund.
Fund crypto address:
If Bitcoin, send to this address:
1HkFVv42NvLrG5wNubX4MCmoS5xo33sU9y
If Ether, send to this address: 0xB599ff1910A23ED2e520259C360A4A6D4986F00c
After we confirm your transaction we will email you additional setup instructions for our liquid democracy system, where you will then be able to vote (or delegate your votes).

Alternative steps 1-5:
Use Circle or Coinbase which allow you to purchase $300 USD worth of BTC instantly with your debit card.
Then create a Ethereum Wallet account and back it up.
Then use http://shapeshift.io/ to turn that BTC into ETH.
On ShapeShift, simply enter the address to your new Ether Address. It'll tell you where to send your BTC. In Circle or Coinbase, send all the BTC to that address. The ETH will appear in your ETH wallet in ~20 minutes.

Alternative steps 6-8:
Ethereum Wallet is highly recommended but some people have issues installing it if you have firewalls or older computers.
If for some reason you cannot get it to run, here is a list of easily accessible wallets. Follow the instructions provided by each of these wallets to backup your information:
MyEtherWallet.com / GUI / Website / can be downloaded or Chrome Extension
Kyptokit's JAXX wallets / GUI / Unofficial / Multi-Platform
Icebox / Primarily for Cold Storage / can be downloaded / by christianlundkvist @ ConsenSys
EthAddress.org by ryepdx / GUI / Website / can be downloaded
Kryptokit's ethereumwallet.com / GUI / Website
In Jaxx, that is a mnemonic. In EthAddress and MyEtherWallet, you can save the text version of the private key, print out a version, or save a JSON version (like the keystore file in Ethereum Wallet). Just MAKE SURE YOU BACK IT UP.

How will my ownership interest convert into financial returns?

Each tradable asset has the ability to appreciate in value; as in other areas, this appreciation is highly determined by the supply and demand curve. For example, an asset that is issued in limited quantity to a small number of people and which then goes through significant marketing cycle will usually find a significant boost in the desire to acquire that asset and the price will increase as a result.

Price movements in crypto assets often face slightly different valuation criteria than the normal market as well as their own often accelerated cyclical growth patterns. In general highly ambitious and technologically advanced projects are preferred. Additionally, there are numerous new types of asset classes which trade on these exchanges. Some of these do extraordinarily well and experience extremely rapid appreciation.

In the first case, the SWARM coin as it exists in Ethereum is programmed to have a structured release of liquidity over the course of one year in which it will be transformed into a tradable asset and can be exchanged back into other assets. Additionally, our plan with SWARM is to make a consumable currency in the context of the Ethereum network so that various decentralized applications can make use of the same base currency.

Consequently, there are three primary ways of making money. The first will be appreciation in the base asset associated with SWARM. The second will be privileged information which is made available to Swarm members which allows them early access to good deals on assets issued through Swarm. The third will be trading on other crypto assets, partially through the informational network that SWARM creates.

Ideally you will make money in all three of these ways. Also, it is partially because of the second and third elements that we privilege highly personal relations among Swarm members including a global distributed informational network.

What sort of fees exist on the platform?
The whole system is designed as a non-profit which maintains the platform technology with multiple nested sub-funds. Fees are designed to make all sub-funds pay a platform fee in order to exist and participate, and to provide on-going funds for maintenance of the “commons,” which presumably enhances the overall network effect. The primary fee is the “carry” which is a common design feature in venture capital and hedge funds and which means that the platform accrues money when people who are using the platform make money. This will be a minimum of 1%. There may also be usage fees and processing fees for the platform either through us or third-party payment processors.
How do I gain reputation? Can anyone give anyone else reputation?

With our open-access model any person or AI can create any account and make any ascription of reputation or value to any other. Like many other open-access models, this has the potential downside of spamming and pollution of the actual trusted value statements. Consequently, we are simultaneously working on an underlying decentralized reputation engine, which incentivizes good actor behavior and creates a trust layer for the network, based on track record.

How will Swarm handle updates to its code after launch?

We will have a tiered release cycle in which the platform will remain in a stable state on a private blockchain for several months before official release onto a public one in order to give us sufficient time to iron out any problems.

Where is the code?

Our initial smart contract implementation is on Github.

Swarm and the Blockchain Technology

Can you provide some introductory material on Ethereum and the comparison to BitCoin?

Some articles worthwhile reviewing:
What is Ethereum? A Step-by-Step Beginners Guide
BitCoin vs. Ether - video series
Blockchain is Eating Wall Street | Alex Tapscott | TEDxSanFrancisco

What is your relationship with Ethereum and the Ethereum Foundation?

oel Dietz created two important early contributions to the Ethereum project. He created the first and most popular independent media channel for smart contract creation (EtherCasts) and bootstrapped and facilitated the growth of the Bay Area Ethereum community. For these and other contributions he was awarded Ether in the premine.

Joel Dietz also was involved in the genesis of several key projects in the Ethereum ecosystem. Most notably BTC Relay (which was formulated in our Palo Alto offices), Metamask (which he pitched at DevCon 0 and turned into its funded project via a DevGrant proposal) and Boardroom/Weifund, which received their first capital from Swarm. Several Ethereum core team members have also stayed at the “Holon” hacker house that Joel Dietz set up in Palo Alto.

However, Joel Dietz has never had any formal relationship with the Ethereum Foundation and has deliberately decided to stay independent and generalized. For example, the Decentralized Autonomous Society is the largest independent group on decentralized governance, and although it takes much of its founding inspiration from Ethereum, it focuses on general innovations in decentralized governance technology.

Joel’s opinion on Ethereum, shared by other technical architects he has spoken with, is that it shares the strengths and weaknesses of other large open source projects. Most notably, it is extremely inspirational for a certain type of technological innovator who wants to be on the cutting edge of technological development, but has often chosen to be more “cutting edge” than to employ standard “best practice” in the software development industry.

Although Joel Dietz has immense respect for Vitalik Buterin as he details here, he would generally prefer a more stable environment for long-term development of production software.

Why are you planning to use Ethereum as a platform?

Ethereum is the first fully implemented smart-contract capable platform and the one with the most liquidity. It is also arguably the best maintained and robust. For example, as of the writing of this the total market cap of Ethereum is approximately $900M with over $100M in tradable assets issued on the Ethereum blockchain. Additionally, although there are other platforms which contain some element of asset issuance and tradability, only smart contract capable platforms like Ethereum have the ability to dynamically control funds via embedded governance protocols. For example, the stake-weighted liquid democracy system we have created would be considerably more difficult on a different platform.

What do you think of the DAO?

The DAO was a fascinating experiment that appropriately garnered a lot of attention for doing something that was extremely ground-breaking. Unfortunately, it may have attempted to do too much too quickly. Our implementation has started with a more robust governmental model and has several checks and balances that prevent technical failures from causing damage to real assets.

How is this different from the DAO?

The DAO was an ownerless venture capital fund driven by majority consensus deployed as a DAO. It shows, among other things, the enthusiasm in the market for such a solution. Its major flaws included a rush to market, an overly centralized single implementation, a lack of a solid governance model that allowed for evolution, and distributed economic incentives that did not allow for individual achievement.
Our model is different from the DAO in that each project resembles a traditional company in its ownership structure. Ownership is gradually sold off over time to the crowd and it becomes autonomous in stages as the technology and model are proven. This allows rapid decision making and iteration during the early stages of the project when this is necessary and some degree of pivoting and technological upgrades that may be necessary during the implementation.
Our model is deliberately modular in the sense that funds are pooled around projects and that each project has its own set of incentives and can succeed or fail without affecting the overall network. This means that each individual can decide on the value of various offerings on their own without an extensive or complicated consensus process.
Our model also has an ‘innovation tax’ which is taken from each project and goes back to fund public goods that can benefit the overall network, rather than somehow attempting to take this out of the actual fund itself. We also believe raising less capital but having a coherent governance structure and high quality business opportunities will allow significant appreciation in the base asset.

 

 

The DAO

Swarm Fund

Organizational model

Centralized (single mega-fund)

Modular (each project is distinct)

Governance model

Full democratic voting

Stake-weighted delegated voting

Curation model

By “curators” prior to listing

Post facto by community

Deployment model

Immediate

Staged

Sale model

All at once

In stages based on needs at the time

Blockchain model

Ethereum Foundation’s official chain (ETH)

Can be deployed across multiple chains

Liquidity model

Full immediate liquidity

Escrow model with liquidity released over 12 months

Infrastructure model

Needs to be funded by vote

Consistently applied innovation tax that goes back into funding base infrastructure

 

Is the June 17 2016 DAO hack relevant to Swarm? Does it have a similar vulnerability?

As with all software systems, you are potentially vulnerable to problems in poorly written code or in the underlying system infrastructure (e.g. compiler/interpreter). In the case of the DAO Hack there were elements of both which turned out to be particularly explosive in combination.
Additionally, as with all prominent and open elements of high financial value, the DAO made itself the subject of intense scrutiny and attracted sophisticated attackers. In this sense, we expect that our system will over time attract the same level of attention.
Consequently, it is our desire to make sure that all of the different levels of our stack are adequately trialled and audited before release and make sure there are adequate safeguards in the case of technical failure.
To this end, we have adopted a tiered roll-out mechanism similar to the Ethereum versions, in which the first implementation exists on a private blockchain and goes through versioning and release cycles in which the functionality is tested and made available. Additionally, all source code is open source, following industry best practice, undergoing multiple levels of third-party auditing.
Additionally, we have introduced Szaboian-nested intent clauses in our non-profit to enforce intent even in the case of smart contract failure.

What is a Szaboian-nested intent clause?

It is a concept coined by Nick Szabo based on the legal systems of the middle ages in which there was a standard interpretation of a legal clause including an “override function”. This means a third party could interpret whether ethics and intent had been appropriately followed. This was possible due to the difference between feudal and religious court systems and their different domains. Within the world of smart contracts this effectively means that the intent is codified first then the smart contracts represent an implementation of the intent. It also means that at a point in which the implementation diverges from the intent, the third party can make sure that the intent is followed. In our case, an Estonian non-profit serves as the third party to the smart contract implementation, acting as both custodian and enforcer of intent.

How is this better than other decentralized marketplaces?

Up until now there have not been any decentralized marketplaces that were governed by their members, nor any that evolved alongside a reputational system. Additionally, all decentralized marketplaces have looked primarily at internal blockchain types of assets rather than structured real assets with unique financial instruments that lend themselves to automated investment.
We believe that the combination of real value, automation, and reputation is a generalizable model that can provide clear short-term value and can evolve into an industry standard for all investment systems that benefit from increased trust and transparency.

What is your opinion on Ethereum and Ethereum Classic?

As one of the ostensible values of blockchain smart contract systems is immutability, we are strong supporters of the idea behind Ethereum Classic. That said, we think the current state of this system warrants a gradual iterative attempt towards a more stable overall system state and that, due to the need for technical upgrades and bug fixes, some sort of generalizable upgrade path is necessary. At the moment "hard forks" are one major necessary component in iterating on the technology.

Also, there would have been severe regulatory and other repercussions if all the investors in the DAO had lost their finances which would have set back general Ethereum-related development. Consequently, we supported both the decision of the hard fork for the Ethereum Foundation and the continued existence and maintenance of Ethereum Classic by other parties. An added benefit of Ethereum Classic is that it removes any general liability concerns for "projects gone wrong" (such as clearly was the case with the DAO).

The development of Ethereum Classic, including whatever methods will be used to create decentralized consensus, still remain somewhat undefined. It is possible, however, that the community will rally behind the liquid democracy solution we have created, which would give us a good reason to deploy first in the Ethereum Classic world.

Is miner centralization a concern and are you exploring other types of consensus?

The current standard model of securing blockchains is highly dependent on certain economic models that are still experimental. Most problematic is the idea that over time block rewards can be superseded by transactional costs. Also problematic is the high degree for which incentives are weighted towards early adopters. These two, in conjunction with the high cost, the otherwise uselessness of mining, and the centralization of mining operations themselves, do lead one to look for other methods for securing blockchains.

Consequently, we are actively following all types of consensus mechanisms that have been proposed, including sharding, proof of stake, tendermint-style consensus, and various types of quantum-inspired consensus, without any definite conclusions, except that we wish to remain engaged at the protocol level as well as the technological level.

Our general process is effectively two-pronged. For our implementations we look for stable production-ready blockchains that can run related technology with the expectation that the blockchain will still be working in roughly the same fashion in five years. This is a significant upgrade from our 1.0 implementation which was more able to be deployed on technologies that themselves were in prototype form.

Secondarily, we remain active in our engagement in long-term research, especially the intersection between quantum physics and computer science where we are especially closely engaged. These types of technologies we expect to emerge into usable systems within the 3-5 year range and we are generally more optimistic about these for maintaining an overall stable state.

Where do I find out more?

Mining / Network
https://www.cryptocoinsnews.com/bitcoin-highly-centralized-network-says-harvard-researcher/
Overall impact:
https://medium.com/the-coinbase-blog/how-digital-currency-will-change-the-world-310663fe4332#.dsxkormpp
Crowdfunding / ICOs:
https://www.coingecko.com/buzz/ico-emerging-decentralization-crowdfunding
http://www.crowdfundinsider.com/2016/10/91794-rise-equity-crowdfunding-report-crowdfundinghub/
Blockchain investments and the new problem asset for conventional VCs
App Coins and the dawn of the Decentralized Business Model
All you need to know about ICOs