Swell Network is revolutionizing the DeFi space in the Ethereum Ecosystem, as it brings innovation through the Liquid Staking and Restaking mechanism.
Liquid Staking and Restaking has been one of the most popular narratives in the DeFi or Decentralized Finance space as it introduces a more “liquid” way to stake cryptocurrencies.
This trend has managed to attract many investors into the space, reaching a total value locked of billions of dollars in just a short time.
Many introduce these mechanisms, however, it is still rare that one platform introduces both mechanisms in one.
Swell Network is one of these rare platforms that introduces both liquid staking and liquid staking, all in one platform.
What is Swell Network?
Swell Network is a decentralized finance platform that was launched on the Ethereum Blockchain through the help of EigenLayer.
EigenLayer is a popular infrastructure platform to help developers create their liquid staking or liquid staking platform by connecting liquidity from different platforms all in the ecosystem of the Ethereum Blockchain.
Swell Network itself started being developed in 2021, however, it officially launched in 2023 with its mainnet being able to be used by the public.
Since then it has managed to attract many investors, reaching a total value locked of around $1 Billion.
The project’s main value proposition is the liquid staking and liquid staking platform using ETH as their main crypto.
Users can stake ETH to receive a liquid staking token called swETH, which can then be restaked to receive rswETH.
The value of those tokens is the same, which means that, when a user locks $100 in ETH, they will receive $100 in swETH. If the user also locks $100 in swETH, then they will receive $100 in rswETH.
The mechanism introduced a more liquid way of staking so that the users can earn rewards by locking their coin while receiving another token of the same value, so it's as if the coin is not being locked.
Swell is currently developing something new called Swell L2, where it plans to integrate a layer two blockchain ecosystem such as Polygon, to expand its liquid staking and liquid staking ecosystem.
With this launch, it is currently accepting deposits in the liquid staking token form of ETH on its platform which will then be used as initially locked liquidity, where the owners of these tokens will receive points and airdrops.
How to Utilize the Platform
To utilize this platform, users can head on to the Swell Network Decentralized Application and start by connecting their wallet to it.
It is essential to remember that users need to own ETH to utilize the platform, as ETH is the main coin of this platform that will be used as the utility coin as well as the gas coin.
Staking and Restaking on Swell / Source: Swell Network
After that, users can stake their ETH to earn swETH in the platform which can be accessed easily without any registration process.
When users take ETH, they will receive an APR of 3.33% while being able to use their money through the swETH Token.
After that, users can restake their swETH Token to earn 2.71% on top of the 3.33% of APR that they are earning.
When staking swETH, users will receive a liquid staking token called rswETH, which means that when receiving a total of 6% APR, users will still be able to use their money through the rswETH Token.
However, it is important to note that to claim the initial ETH, users need to redeem their swETH by swapping it with rswETH, and then swapping their swETH with the initial ETH staked.
While redeeming is a complicated process, the profit from the APR will be directly deposited into the wallet of the users without the need to exchange anything on the platform.
If users want to capitalize more on this process, they can head over to the farming protocol of the application and lock their rswETH with another token as a pair in a liquidity mining pool.
Users can receive up to 30% APR from this process alone, which will be around 36% APR when combined with the liquid staking and restaking mechanism before this.
Conclusion
Overall this platform can be beneficial for DeFi enthusiasts as it introduces a new way of staking.
This platform is projected to be one of the leading platforms in the liquid staking and liquid staking category, so it is good to keep an eye out on the development of this project, especially since the project will be doing some airdrops in the future.
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