Simply put, Swarm City’s token, SWT, is used as the unit of exchange for all transactions on their network. Since SWT is an ERC20 token, and Swarm City runs on Ethereum, Ether is involved to an extent, but the majority of all interactions within this platform and all fees will be using the Swarm City Token (even if you can see the price in USD or euros). SWT is needed to participate in the ecosystem and to do anything on the network.
Because Swarm City came from Arcade City, if you have Arcade City tokens, you can convert them to Swarm City tokens, if you have not already. The teams whitepaper on how to is on GitHub.