A non-profit platform providing compliant access to formerly exclusive investment opportunities, Swarm delivers MAP: an open protocol supplying a sound framework for the whole security token industry to develop and grow.
Introducing Market Access Protocol (MAP)
Swarm is the first live blockchain platform to provide the unprecedented opportunity to co-invest in real, high-return assets, formerly exclusive to only the well connected and wealthy. We have developed a legally compliant framework allowing for the tokenization of investment opportunities in order to automate, manage and simplify the transactions and agreements between parties with blockchain technology. Now we at Swarm are inviting others in the security token industry to do the same by leveraging our open protocol.
Today we announce Market Access Protocol (MAP) to solve existing inefficiencies and difficulties encountered by token issuers, investors, exchanges, and qualification providers alike. Until now, there has been no ‘one’ globally compliant protocol to provide this framework on which the industry can build to integrate and transfer security tokens in a uniform way. This is because each centralized, for-profit entity is incented to do what is best for themselves, not to think about interoperability or broader access beyond their scope. Yet, each of those entities can unlock incremental value when access is expanded for all. To that end, MAP is an open source infrastructure, designed to be the industry standard protocol empowering the entire security token market.
“Existing whitelisting solutions are highly demanding on investors and infeasible for qualification providers and exchanges to adopt. With MAP we are releasing an open protocol that enables participants in the security token market to interact based on essential privacy, incentives, and integration efficiencies. MAP will be a catalyst for the next wave of growth in crypto investing.” -Philipp Pieper, CEO of Swarm
What is MAP?
Simply put, MAP enables the flow of compliant securities transactions to be processed on the blockchain by determining how market access data is stored, read, written and audited in accordance with the SRC20 protocol — the cryptographic standard for security tokens. To compliantly sell, purchase, or transfer securities, a number of conditions, qualifications, and restrictions must effectively coordinate to permit a successful transaction.
Swarm has identified and incorporated the following core principles in order to deliver a profitable and sustainable ecosystem to support security token trading:
Play by the Rules
MAP provides compliance and regulatory proof thereof by ensuring that all requisite parameters are met before a security token transaction can be processed. These parameters often include valid credentials of participants, token restrictions and requirements, geographically based jurisdictions, KYC/AML qualifications, accredited investors, etc. Token issuers must be able to report compliance and show audit trail. The successful completion of a transaction implies its validity due to the previously required compliance checks.
While MAP can instantly surface whether or not an individual’s wallet is compliant with the requirements for any security token transfer, it does not contain investor identifying details connected to each wallet. Investor identity is secure and individuals have control over who can access their data.
Qualification providers and all operators within the ecosystem have significant incentives to actively engage, helping to ensure long-term viability.
Ease of Use
MAP is simple and portable. All parties are able to easily integrate with the framework and satisfy their interests. Market access qualifications are available to the right parties at the right time, anywhere they wish to transact. MAP can be opened to any other token infrastructure to be used as a data ruleset/transfer agent on other blockchains.
Integrating MAP mitigates significant time and cost inefficiencies otherwise borne by having to develop and implement a compliance and transaction system from scratch. Since MAP is open-sourced and decentralized, it acts as compliance ledger that enables security token platforms and exchanges throughout the industry to leverage its globally compliant protocol.
We will share further thinking on the infrastructure, use cases, and root components in the days ahead. However, we do not have all the answers. No single project does, which is why the industry needs a common, open protocol. We are thrilled to announce MAP, and to invite the entire security token industry to build with us. We look forward to collaboration across projects and markets to grow smarter and faster, together.
(This article is originally posted on Swarm Blog.)