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In our latest Space, we were joined by three Swellchain dApps – Bubbly Finance, Ion, and Neptune – to discuss how they will unlock new potential for restaked assets.
What is Swellchain and what are we aiming to achieve?
“Swell is a liquid staking and restaking protocol that launched on Ethereum mainnet last year, and since then has grown quite a bit with $1.5B in TVL across the different products that we offer such as swETH, rswETH and swBTC, as well as in L2 pre-deposits.
Proof of Restake is something that Swell has been working on for the past 6 to 7 months. Being so entrenched in the restaking space, we saw that there was a lot of the focus on restaking and building AVSs, which led to an abundance of things wanting security, but not enough people trying to use the security.
Proof of Restake at its core is an extension of Proof of Stake (PoS), where PoS is what Ethereum, the base layer, is doing, whereas Proof of Restake (PoR) is where we take all of this to secure the sequencer, the DA layer, and AVS’s at the dApp layer. This will allow us to be the core place for everything restaking in the ecosystem.
Swell is working really closely with all of the LRTs to build the chain that is specifically focused at providing the best experience for LRT holders. These LRTs will be able to secure different components of the chain, and DeFi protocols such as Neptune, Bubbly Finance, and Ion, that will be working towards building primitives that are specifically targeted at providing the best DeFi infrastructure for LRTs.”
– Abi, Swell
Please could you provide an overview of your protocol?
“At Bubbly Finance, we are building a Uniswap v3 experience for users to trade pre-launch tokens and points. Once launched on Swellchain, users can come to Bubbly and find all of the projects that plan to, or have already, launched points programs.
Bubbly can provide price discovery which will help capture market attention and user interest, ensuring that protocols gain very early traction, and users can make informed investment decisions in the pre-market phase.”
– Black, Bubbly
“We've been in DeFi for quite some time and liquid restaking has always been quite interesting. The Swell ecosystem in particular is very interesting, and we saw Neptune being one of the core primitives that could be the go-to place where people want to swap, trade and move in and out of different assets.
Our partnership with Swell is something we look forward to continuing to collaborate closely on, where we can build out a future that the ecosystem would like to see, while being the go-to source for liquidity and place for people to transact.”
– Dean, Neptune
“Ion is a lending market built specifically for yield bearing assets such as LRTs and LSTs. There's two mechanisms that are unique to Ion; a) isolated markets, and b) removing all price based liquidation risks and moving to an exchange rate risk model.
- Isolated Market - Allow us to take a look at one asset and underwrite it. This allows us to be super efficient and get aggressive with LTVs, which translates to better rates for borrowers and lenders. By doing that we minimise the exposure of bad debt to the protocol, produce a market collateral list to suppliers, and minimise volatility and liquidity risk.
- Removing Price Based Liquidation Risks - Allows us to create a more secure and capital efficient market for lenders and borrowers. Lenders are able to be compensated with rates that are above the staking and restaking rates without taking on additional risks. Borrowers on the other hand, have the flexibility to leverage up to 15x leverage on their underlying collateral, and take full advantage of and maximise their yield. This is a great way to increase your exposure to points programs, yield rates and everything else.
This is why we are so excited to come to Swellchain, which will be the home of yield and restaking, with so many opportunities to leverage up on these restaking rewards.”
– Danny, Ion
Why did you choose to build on Swellchain?
“The Neptune team have a lot of expertise in the EVM space and with that being the case, the liquid staking narrative and desire, coupled with the fact that there was a lot of day one TVL support, made it very attractive to build on Swellchain.
At the end of the day Layer 2’s are quite competitive. The differentiators are basically how big of a treasury can you amass, and how much firepower do you have to attract TVL. Being able to participate in a growing ecosystem with substantial TVL, firepower to support builders, and incentivised additional TVL acquisition was very attractive.”
– Dean, Neptune
“We chose to build on Swellchain because of the visionary team and great strategic plans for their L2 expansion. The Swell team stands out for their strong operation and deep commitment to building a robust Layer 2 ecosystem, especially for the collaboration with Bubbly Finance. We think that if Bubbly can provide an AMM protocol for Swell to create a points hub for the protocols, the yielders will have a place to reach incentives that have more value.”
– Black, Bubbly
“We have known the Swell team for a long time, and they are one of our favorite teams to work with in the DeFi and crypto space, so it wasn't too hard of a decision to make.
We have confidence that Swell is going to be the home for yield with restaking and they're focused on curating a well thought out DeFi ecosystem which is really attractive to us.”
– Danny, Ion
What can we expect next from your protocol on Swellchain?
“We are going to become an immediate sink for yield bearing assets on Swell. This will enable users to lever up, as well as provide the best opportunities for more risk-off market participants to gain exposure. We’re really excited for things to kick off soon, and cook up some yield for everyone here.”
– Danny, Ion
“Firstly we will continue to widen our pre market trading on Swellchain, where users can trade pre-launch tokens and points. Buyers and sellers will be able to deposit collateral to trade points, and liquidity providers can provide USDC or SWELL in the pools.”
– Black, Bubbly
“We are going live at the same moment Swellchain does, and we are excited to be the go-to hub for trading activity for all tokens, and especially LRTs.”
– Dean, Neptune
Thanks to everyone who attended the event!
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