Overview

An overview of Swivel in the context of enterprise.

Swivel is building decentralized infrastructure for interest-rate derivatives. This includes various cash flow instruments, with the first product being similar to a fixed-for-floating rate swap. Swivel is built upon a series of smart contracts that support an order-book based marketplace for interest rate derivatives. Starting with a simple fixed-for-floating exchange, Swivel intends to develop a series of instruments that enable efficient risk management, funding optimization and exposure hedging.

Our initial focus allows investors seeking stable predictable cash flows to receive fixed rates, and risk seeking investors to leverage floating rate positions. Over time, we plan to use the order book venue to introduce a range of digital instruments for rate profile optimization.

For large and small scale enterprises including financial institutions and institutional investors, Swivel offers a service with a range of advantages to different roles in your organization:

• Optimize rate profiles

• Reduce cost of funding

• Improve treasury management

• Improved Risk management through hedging

• Improved liquidity management

• Market making fees and attractive incentives

• Offer retail and institutional clients an alternative to traditional fixed income products with potential for high returns, suitable for both stable return and risk-seeking investor profiles

• Low ticket size, reduced barriers to entry and thus the ability to offer sophisticated rate management service to individual investor and smaller enterprise clients

Fixed-rate yields provide risk averse lenders with the guaranteed cash flows and avoidance of variability in income streams that may be necessary for their use case. These users have the incentive to lock in the highest rate possible. For interest rate speculators, leveraged money-market vaults provide risk-tolerant lenders and risk averse borrowers the exposure necessary to execute their strategies. These users have the incentive to pay the lowest premium possible for this exposure.

Swivel brings the ability to exchange interest rates among market participants without the need for bank intermediation and bank fees. In addition, the efficiency and low unit cost of our solution enables lenders and borrowers to enter the market at very small ticket sizes, facilitating their access to interest rate management tools that were previously restricted to the costly domain of large institutional investors.

Swivel’s short-term strategy is focused on a single use case, the exchange of principal at a stable fixed rate for leveraged floating rate returns. This allows us to quickly bring an audited, secure solution to market. At the same time, we will be building an order book-based marketplace and growing liquidity around a platform that can in future support a wide range of future interest management products, including but not limited to basis swaps, interest and principal only products, and other predictable (both deterministic and non-deterministic) future cash flow instruments.