Restaking could be the biggest shift in the Ethereum staking landscape yet.
Pioneered by EigenLayer, this new primitive hyperscales Ethereum security, driving major capital efficiency and improved security outcomes for a range of different blockchain services seeking to bootstrap decentralized trust – from oracles and bridges to data availability layers.
To help you understand where Swell Restaked Ether (rswETH) fits into the restaking revolution, here are three things you should know about our soon-to-be released liquid restaking token.
1. Risk management is the priority
While restaking has huge potential, harnessing the same pool of assets to provide security for multiple networks creates additional risk. These include heightened slashing risks, and rehypothecation risks where the failure of a single validator creates a ripple effect across the ecosystem.
Managing these risks is the top priority in the development of rswETH, which is why we're working closely with EigenLayer and leading DeFi risk management firms.
The development of rswETH is also supported by the Liquid Restaking Council. This comprises leading players in the emerging restaking ecosystem, who have come together to ensure the best practice design, development, and delivery of rswETH,
2. Uncapped access to Pearls and Points
Hot demand for swETH on Eigenlayer led the caps to fill in just over two weeks, with ~115,000 swETH restaked.
As rswETH is natively restaked, it is unaffected by the LST caps, and will offer uncapped access to EigenLayer rewards!
These rewards will comprise both Pearls and Points:
- Pearls represent a claim to SWELL tokens, and will be available to collect until the Token Generation Event (TGE), which is forecast for late Q1, 2024.
- Restaked Points measure your contribution to the shared security of the EigenLayer ecosystem.
Ultimately, you will also be able to earn restaking rewards by contributing economic security to Actively Validated Services (AVS's). This is expected to happen when EigenLayer begins onboarding AVS’s to mainnet later this year.
3. rswETH can be used in DeFi
When you restake Swell’s liquid staking token swETH into EigenLayer, you must keep it there to continue earning restaking rewards.
rswETH on the other hand, will remain liquid. This means you can use it however you choose in DeFi — without losing out on your restaking rewards.
As a reward-bearing token, rswETH will continue to rise in price as the rewards accrue, regardless of where it is allocated.
rswETH is coming sooner than you think, and is now expected to hit mainnet in the next few weeks!
Stay tuned for further announcements about rswETH and join our thriving community on Discord, DeBank, and X.
