GM Aquanauts - The DAO is on-track with the architecture upgrade, which will see the protocol reopen staking deposits in late Q1 / early Q2 2023. This will result in more scalable, proven, and robust architecture. We would like to thank our community, backers, and stakeholders for their support and patience during this important rebuild phase.
About the upgrade
The crux of the upgrade involves changing our liquid staking token (LST) - Swell ETH (swETH) into a fully fungible, single, reward-bearing receipt token.
This shift will promote greater composability, liquidity, and interoperability across DeFi. It also makes it simpler and easier for stakers.
The movement to a reward-bearing token model means that swETH will now represent staked ETH plus net rewards accrued over time. Note that accumulation of these rewards will be reflected in the underlying price / value of swETH, which should appreciate over time.
For more information, please read the updated litepaper which contains a general overview of swETH and its mechanics.
Completing the upgrade
Overall, feedback on this new and improved design has been positive. The DAO is very excited in its run-up to go live in April. Once the upgrade is complete, the issuance of swETH will now from a pooled deposit model which reflects standard staking pool design. This is a stark change from our previous atomic deposit which enabled selection of individual operators. This is no longer the case with Swell.
Part of this also involves partnering with a vetted set of experienced node operators during the initial phase of the protocol being on mainnet. These are institutional operators who have significant experience in running validators at scale and interfacing with LSTs.
The previous atomic deposit / NFT architecture is deprecated. It remains in research and development as an innovative albeit experimental technology.
Supporting current stakers
A major priority for this upgrade is ensuring that our current stakers who participated in the capped first stage of our guarded launch are supported. For those ~150 wallets, the original staked ETH amount will be automatically minted in swETH and distributed to corresponding accounts as part of the migration. The accompanying Swell NFTs (swNFTs) will be burned as they will no longer be required in the upgraded version of our protocol.
Note: If you currently staked with Swell, please note that no action is required on your end. The Swell Labs team will be seamlessly managing the migration to the new protocol architecture and will keep you updated throughout our regular channels. Upon completion of the migration, stakers may choose to either continue to hold the new reward-bearing liquid staking token or exit their position via our planned Balancer liquidity pool which will be bootstrapped as part of go-live.
To support our stakers, we have set up a dedicated channel under #sweth-hodler on our Discord server, where we welcome any questions you might have.
Stay up to date
To stay up to date, please follow us on Twitter and join our Discord server where you can meet and chat with the rest of the Swell community. If you have any questions, please feel free to reach out and our team will be very happy to help.
