Swell

Staking

Swell is a non-custodial liquid staking protocol.

Risk Rating
Good
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Swell abstracts away the challenges and risks around staking by allowing users to delegate their ETH to professional node operators.
What we like less
Staking with Swell assumes greater security risks as the underlying smart contracts may be exploited. Further, the validators are permissioned and selected by Swell at this stage.
What it means for you
Swell is a popular liquid staking service in DeFi that provides a simple way for you to generate yield on your ETH while removing the opportunity cost of staking. It also offers a liquid restaked token (LRT) leveraging EigenLayer.
Information
Exploit/Hacks
None
Info
  • Website
  • Token: SWELL
  • Tags: Staking
Key Metrics
  • TVL: $676.1M (Rank #32)
  • TVL Ranking by Staking: #0
  • Blockchain: Ethereum
  • Chain TVL
    • Ethereum: $676.1M
Risk Assessment
Good
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; Sigma Prime audited in April 2023
  • Public team promotes accountability
  • No documented protocol hacks since launch
Protocol Maturity
  • Latest protocol version launched in 2023; maturity over nine months reduces technical risk as smart contracts are sufficiently battle-tested
  • Top 5% by total value locked reduces risk
  • Requires members of a DAO to vote on-chain for approving contract upgrades
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • No governance token and/or contracts are fully immutable
Protocol Design
  • No death spiral concerns
  • Robust controls to mitigate oracle price manipulation
  • This protocol is susceptible to risks related to staking a token to secure a network, such as slashing events
Things to know about Swell

What is Swell

Swell allows users to earn ETH staking rewards without locking ETH or maintaining staking infrastructure. Users deposit their ETH into Swell's smart contracts and receive swETH or rswETH (restaked ETH in EigenLayer) in return that represent the value of the user's staked assets along with any staking rewards accrued or penalties inflicted on validators.

How Swell makes money

Swell generates revenue by charging a 10% fee on the staking rewards earned by ETH depositors. This fee is split evenly between node operators and the Swell DAO treasury. There are currently no fees for Swell's restaking product.

How you make money on Swell

You can generate additional yield on top of your ETH by depositing into Swell to participate in the Ethereum PoS validation mechanism to earn block rewards. The unlocked liquidity with swETH can also be redeployed within several popular DeFi protocols to generate additional yield on top of the staking rewards. Alternatively, you can mint restaked ETH (rswETH) to earn restaked rewards through EigenLayer.