Swell, a liquid staking protocol, has seen its total value double this month, reaching approximately $245 million, equivalent to 108,000 Ethereum. Since the beginning of December, Swell has recorded around $125 million in Ethereum investments, propelling it to the fourth-largest liquid staking protocol position.
Following the announcement of Pearl rewards for users who hold Swell’s liquid staking token, swETH, and restake on the EigenLayer platform, there has been a significant increase in protocol entries. This increase coincides with the timing of the reward announcement.
Since the reward program’s inception in mid-December, users have minted over 53,000 swETH tokens, valued at more than $120 million. A substantial portion of these minted swETH tokens were subsequently deposited into EigenLayer.
EigenLayer allows users to deposit and restake various liquid staking tokens from Ethereum to secure third-party networks. It has expanded its supported assets to include six additional liquid staking tokens, such as Swell’s swETH, Stakewise’s sETH, Stader’s xETH, Origin’s oETH, Ankr’s ankrETH, and Wrapped Beacon Ether (wBETH), with Swell emerging as one of the largest protocols in terms of asset inflow.
Despite documented risks associated with liquid staking, Swell’s increase in Total Value Locked (TVL) demonstrates its continued growth within the Ethereum ecosystem. Swell’s popularity is largely attributed to simplifying the complexity associated with staking, particularly in terms of running validator data and allowing users to maintain control over their capital.
Users who stake Ethereum assets on Swell receive a liquid staking token in return, which provides yield. This token not only retains value but also offers flexibility as it can be stored or utilized within the broader DeFi ecosystem for additional yield.