The Ethereum blockchain underwent a revolutionary transformation in September 2022 with "The Merge", transitioning from energy-intensive Proof-of-Work (PoW) to a more efficient and sustainable Proof-of-Stake (PoS) consensus mechanism. This pivotal upgrade not only reduced Ethereum’s environmental footprint but also redefined how users participate in network security—by staking ETH instead of mining.
However, while PoS brought scalability and sustainability, it introduced new barriers: a high entry threshold of 32 ETH (approximately $115,000 at current prices), technical complexity, and long-term capital lockups. These constraints limit participation to well-funded, technically skilled individuals, leading to centralization risks and reduced accessibility.
Enter Swell, a non-custodial liquid staking and restaking platform designed to democratize Ethereum validation and maximize yield opportunities across DeFi.
How Swell Solves Ethereum’s Staking Challenges
Swell addresses the core limitations of traditional staking by enabling users to stake any amount of ETH—no minimums required—and receive swETH, a liquid staking derivative (LSD) token that represents their staked assets plus accrued rewards.
👉 Discover how liquid staking can unlock passive income without locking your capital.
This model allows everyday users to:
- Participate in Ethereum validation without needing 32 ETH.
- Maintain liquidity through tradable swETH tokens.
- Earn staking rewards including consensus layer yields and MEV (Maximal Extractable Value).
- Avoid technical setup—just connect a wallet and deposit.
By pooling user deposits, Swell reaches the 32 ETH threshold needed to activate validator nodes. These nodes then join Ethereum’s consensus layer, validate transactions, and earn rewards, which are distributed proportionally to swETH holders.
The Power of Liquid Staking with swETH
swETH is an ERC-20 token, making it fully compatible with Ethereum’s vast DeFi ecosystem. Unlike locked staked ETH, swETH remains liquid and composable—meaning users can trade, transfer, or use it across various protocols.
Key utilities of swETH include:
- Instant liquidity: Swap swETH for ETH on decentralized exchanges (DEXs) anytime.
- Yield amplification: Deposit swETH into Swell Vaults for additional yield via liquidity mining.
- Liquidity provision: Supply swETH to DEX pools and earn trading fees.
- Collateral usage: Use swETH as collateral on lending platforms like Aave or Yearn to borrow assets or generate further returns.
- Restaking potential: Stake swETH again via EigenLayer to earn extra rewards (more on this below).
Over time, the value of swETH increases relative to ETH as staking rewards accumulate—a dynamic tracked by Chainlink’s proof-of-reserve oracle, ensuring accurate and transparent exchange rate updates.
Introducing Liquid Restaking: rswETH v2
Swell doesn’t stop at liquid staking—it extends into liquid restaking through rswETH (Restaked Swell Ether), specifically rswETH v2.
Restaking allows stakers to reuse their already-staked assets (swETH) to secure additional protocols built on top of Ethereum, known as Actively Validated Services (AVSs)—such as Layer 2 networks, bridges, and oracles. This is made possible through integration with EigenLayer, a protocol that enables trust-minimized service reuse of Ethereum’s security.
When users restake swETH:
- They receive rswETH tokens representing their position.
- Their liquidity supports specialized EigenLayer operators who validate AVSs.
- In return, they earn additional restaking rewards, compounding their yield.
Critically, rswETH remains liquid and price-appreciating, unlike native EigenLayer restaking which locks ETH and lacks liquidity. This innovation opens up multi-layered yield strategies while preserving flexibility.
Why Swell Stands Out in the Liquid Staking Landscape
While competitors like Lido dominate in total value locked (TVL), Swell differentiates itself through:
- Lower operational costs and higher net returns for users.
- A user-first interface with gamified elements like the “Swell Voyage” experience and nautical-themed design.
- No minimum stake requirement, lowering the barrier to entry.
- Full non-custodial control—users retain ownership of private keys.
- Deep integration with over 40+ DeFi services, enhancing composability.
Additionally, Swell has taken proactive steps to ensure security and sustainability:
- Partnered with leading risk firms Gauntlet and Chaos Labs.
- Audited by blockchain security experts Sigma Prime.
- Built on a foundation of transparency with real-time data available via Dune and DefiLlama.
As of now, Swell has secured approximately $1 billion in total value locked (TVL)**, with swETH achieving a market cap of around **$820 million and a circulating supply of over 222,000 tokens.
Governance and the Future: SWELL Token
Swell operates as a Decentralized Autonomous Organization (DAO), where decisions about protocol upgrades, node management, treasury allocation, and partnerships are voted on by community members.
The upcoming launch of the native SWELL token—expected in mid-April 2024—will empower governance participation and drive ecosystem growth through:
- DAO voting rights
- Incentives for liquidity mining
- Referral and airdrop programs
Though final details on supply and utility are pending, SWELL is poised to become central to long-term protocol sustainability and user engagement.
Frequently Asked Questions (FAQ)
What is liquid staking?
Liquid staking allows users to stake their crypto assets while receiving a tokenized representation (like swETH) that remains tradable and usable in DeFi, eliminating liquidity lockup.
Can I stake less than 32 ETH on Swell?
Yes. Swell removes the 32 ETH requirement by pooling deposits. You can stake any amount and receive swETH in return.
Is Swell safe and decentralized?
Swell uses non-custodial architecture, professional node operators, third-party audits, and DAO governance to balance security and decentralization.
What’s the difference between swETH and rswETH?
swETH represents staked ETH on Ethereum. rswETH represents restaked swETH on EigenLayer, enabling additional yield from securing other protocols.
How do I start staking on Swell?
Connect your Ethereum wallet (e.g., MetaMask), deposit ETH, and receive swETH instantly. No technical setup required.
Will there be a SWELL token airdrop?
Yes. Users have been earning “Pearl” points through participation, which can be redeemed for SWELL tokens after the TGE in April 2024.
👉 Learn how next-gen DeFi platforms are turning staking into sustainable passive income.
The Road Ahead: Layer 2 and Beyond
Swell is expanding its infrastructure with a dedicated Layer 2 rollup for restaking, developed in collaboration with AltLayer and EigenDA. This L2 will optimize performance and cost-efficiency for liquid restaked assets, further solidifying Swell’s role in the emerging restaking economy.
With rising anticipation around Ethereum ETF approvals and the Bitcoin halving in 2025, demand for secure, high-yield DeFi solutions is set to surge. Swell’s low-cost, user-friendly approach positions it as a key enabler of mass Ethereum adoption.
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