Delivering compliant and accessible real-world asset tokenization on Hedera

Problem

Traditional real-world assets remain trapped in fragmented markets with high barriers to entry, limited liquidity, and opaque processes. Investors face costly intermediaries, geographic restrictions, and inability to fractionally own premium assets. The lack of blockchain-based infrastructure prevents efficient tokenization, creating inequality in wealth-building opportunities.

Solution

The platform solves the market’s need for secure, compliant access to tokenized real-world assets in DeFi. By building on Hedera, it provides a transparent, regulated framework where tokenized stocks and commodities are securely held, giving investors direct asset rights and unparalleled trust through institutional-grade network governance.

By working with Hedera, we leverage a network that has stood the test of time and is trusted by institutions worldwide. This partnership is crucial for our mission to make regulated, real-world assets accessible to everyone, from the smallest retail investor to the largest institution.

Katie Evans

Chief Business Development Officer

Delivering compliant and accessible real-world asset tokenization on Hedera

Swarm is a leading web3 infrastructure provider with a mission to create transparent, programmable and trusted financial markets on-chain that create value for many. As an end-to-end RWA (Real-World Asset) protocol, Swarm enables the compliant tokenization and trading of public equities, bond ETFs, and commodities like gold. Founded in 2017, Swarm was built to leverage the benefits of decentralization—such as 24/7 peer-to-peer trading, limited intermediaries, and instant settlement—for traditional asset types, making these assets far more accessible to a broader investor base. 

“Our team felt that the projects promoting themselves as trading solutions for tokenized assets were missing the mark. They couldn’t really leverage the benefits that DeFi had to offer and still be compliant – let alone accessible to, and most importantly trusted by, individual and institutional investors. So that’s when we set out to create our own solution.”
– Katie Evans, Chief Business Development Officer

Robust, bankruptcy-remote issuance

The team has applied innovative thinking to achieve the highest level of user trust. A key differentiator for Swarm is its robust, bankruptcy-remote issuance structure. What this means is that any real-world assets that are tokenized are purchased and held by an independent subsidiary of Swarm, SwarmX, in institutional custody, rather than on Swarm’s balance sheet. This ensures that token holders’ rights to the underlying collateral are protected even if the parent company faces financial difficulties—a critical feature that distinguishes Swarm from other tokenization models where assets can be entangled in corporate bankruptcy, or where token holders can easily lose their investments.

Swarm ensures that investors on their platform are protected and will never have to deal with this type of uncertainty. This level of transparency and accessibility, combined with a fully decentralized peer-to-peer trading platform provides a secure and easy user experience familiar to Swarm users.

Overcoming market challenges with regulatory innovation and asset security 

Their journey has involved navigating two primary market challenges: regulatory compliance and investor security. On the regulatory front, Swarm has been ahead of the game for quite some time. In early 2020, Swarm capitalized on a key regulatory shift in Germany, where the government updated their Banking Act to bring cryptocurrencies in line with traditional financial products. While this helped to ensure the highest of regulatory standards would be applied to these assets, it also meant that any company that wanted to deal in them needed to be licensed to do so. Swarm was able to secure this provisional licensing, making them a pioneer in regulated DeFi within a top-tier jurisdiction at a time when “regulation plus DeFi was just not a thing. 

“This early mover advantage was critical”, as Katie Evans notes, “We were the only ones that held these provisional licenses… There was no one else that could do what we were doing.” 

Additionally, whereas most of today’s RWA platforms can only offer participation to institutional or sophisticated investors, Swarm ensures participation for all. Swarm was the first DeFi platform to comply with the EU prospectus regulation, enabling them to offer tokenized assets to both retail and institutional investors.

The future of Swarm

Swarm is expanding the utility of tokenized RWAs through greater interoperability, forming partnerships across multiple L1 and L2 networks. It is developing a yield token that separates principal from returns, enabling investors to use yield without impacting their core position. Longer term, they plan to extend its tokenization framework into private markets, bringing liquidity and transparency to traditionally opaque assets. Grounded in regulatory compliance and security, Swarm is positioned to lead the next wave of programmable, accessible financial infrastructure.

Why Hedera

Hedera was chosen for its institutional trust, strong governance via the Hedera Council, and proven security—key requirements for regulated financial products. Technically, Hedera’s EVM support integrated seamlessly with Swarm’s platform, while enabling unique features such as on-chain redemption pools. These pools let users instantly sell tokenized assets for USDC, with Swarm handling traditional market settlement in the background, bridging blockchain’s instant settlement with TradFi’s multi-day cycles and solving the liquidity challenge for RWA investors.