Swell Network (SWELL) Project Analysis
Research Institute Review
Swell Network is an ETH liquid staking protocol designed for stakers, node operators, and the Ethereum ecosystem. Users can stake ETH to receive swETH and earn DeFi rewards. Swell’s L2 Proof of Restake mechanism is highly innovative, enhancing asset utilization, network security, and liquidity. This makes it a strong choice for ETH stakers. Currently, Swell Network’s on-chain TVL stands at $1.28 billion.
Recent Breakout Points
The Swell Network airdrop claim interface has launched, with claims starting on November 7. The community is quite active around this event.
Project Introduction
Swell serves as Ethereum’s re-staking yield layer, offering liquid staking and re-staking primitives to DeFi and providing the first vertically integrated Layer 2 re-staking rollup.
Token Utility
Swell DAO comprises three main components: the SWELL token, governance forum, and snapshot voting.
SWELL Token: Grants holders voting rights on the Swell DAO governance platform. Holders can propose and vote on protocol changes.
Incentive Strategy: Adjusts the reward structure for stakeholders and participants.
Fee Structure: Modifies staking and transaction fees.
Node Operator Management: Determines node operator selection, removal, and requirements.
Treasury Allocation: Proposals on using SwellDAO funds for grants, development, or ecosystem expansion.
Tokenomics
The total supply of SWELL tokens is 10 billion.
| Type | Percentage | SWELL Token Quantity | Lock-Up and Release Schedule |
| Community | 35% | 3,500,000,000 |
The first event is the Voyage Airdrop, allocating 8.5%. The second event is the Wavedrop, a series of strategic airdrops for the remaining 7% allocated to the community. These will be distributed within 12 months following the Token Generation Event (TGE). The remaining portion will be reserved for strategic purposes related to community, ecosystem, and strategic incentives. |
| Team | 25% | 2,500,000,000 | Reserved for current and future core contributors and advisors of Swell DAO. These funds are subject to a 36-month linear vesting schedule with a 12-month cliff and lock-up period. |
| Private round | 25% | 2,500,000,000 | Reserved for private investors who provided funding, expertise, and other support during the initial development of the Swell protocol. These tokens follow a 30-month linear vesting schedule with a 12-month lock-up period. |
| Foundation | 15% | 1,500,000,000 | Reserved for strategic initiatives aligned with Swell's overarching vision and mission, including activities such as Layer 2 expansion, product development, ecosystem growth, resource allocation, network expansion, and positioning Swell for long-term growth and sustainability. |
Project Highlights
Swell Network currently operates within a protected mainnet environment as a permissionless, non-custodial Ethereum liquid staking protocol. It offers the first service with integrated atomic deposits, allowing users to stake ETH directly with a validator of their choice, creating a staking marketplace. To provide liquidity for staked assets, Swell mints and returns NFTs, known as swNFTs, to depositors.
swNFT: A container with swETH, staking rewards, and validator data.
swETH: Minted on a 1:1 basis with ETH (principal) deposits.
Investors
Founded in 2011, Swell completed a $3.75 million funding round in March 2022, led by Framework Ventures.
Community
Twitter followers: 91,000
Special Economic Model
None identified.
Future Outlook
Although Swell’s swNFT/swETH aims to address fungibility issues, this feature adds risk factors to the protocol. Similar to stETH, there could be significant divergence between swETH/ETH in secondary markets, even with withdrawal functions, as swETH is only valuable as a staking derivative within Swell positions (limiting its demand). This uncertainty may hinder DeFi integration as swETH could be seen as unstable collateral. While Swell’s innovations bring uncertainty, they also offer unique potential. With Ethereum’s current staking at approximately 11% of circulating supply, significant growth potential remains. Swell launches at an opportune time, offering a transparent, open staking market with a distinct core product. While the liquid staking landscape’s future evolution is uncertain, Swell presents an appealing product for both stakers and node operators.
Basic Information
Project introduction: Swell is Ethereum’s re-staking yield layer, offering liquid staking and re-staking primitives for DeFi, along with the first vertically integrated Layer 2 re-staking rollup.
Token Full Name: Swell Network
Token Symbol: SWELL
Project Website: https://www.swellnetwork.io/
Documentation: None available
Blockchain Explorer: https://etherscan.io/token/0x0a6E7Ba5042B38349e437ec6Db6214AEC7B35676
Liquidity Information: None
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2024/11/7