For this week’s Space, we were joined by Mike from Etherfi to introduce the rswETH-weETH Pool on Curve.
This pool enables you to earn three types of Points on 100% of your position: Pearls, Etherfi Points and EigenLayer Restaked Points!
In case you missed it, here are the top questions from the event.
What do you think is driving the current Liquid Restaking growth?
"Liquid restaking is an interesting space and feels like the next logical step to scale the reward profile of Ethereum. There are a lot of people that are looking for ways to leverage the economic security of Ethereum itself, which is a whole concept of shared security with EigenLayer. Swell is looking to explore this space alongside Etherfi to work on a way to make the liquid restaking safe and secure."
— Abi, Swell
"We have reached an extreme level of excitement around restaking. Everyone views the opportunity of expanding Ethereum’s trust layer as pretty significant and EigenLayer is the biggest project in the space at the moment. What excites me about the restaking space is that I believe there is a genuine opportunity to create a lot of value. Ether.fi and Swell are trying to build real products and the collaboration between the two projects is super important."
— Mike, Etherfi
What should users consider when looking to make the jump to an LRT?
"Thinking long-term, I believe that there isn't going to be this distinction between LSTs and LRTs. The decision really becomes about what projects are building things that make sense long-term and looking at the ethos and tech implementation of the project."
— Mike, Etherfi
"Everything building on mainnet right now has to follow specific rules as well as compete for block space. What’s beautiful about EigenLayer is that it lets you take that security and build your own set of rules while still utilizing the same shared security. Enabling the TVL on Ethereum to loop into different sets of rules is core for Ethereum, as you are expanding the things it can secure without needing to alter the base layer."
— Abi, Swell
How is Swell thinking about building in the Liquid Restaking space?
"One thing that Swell is looking at is the actual AVS providers which we are currently in discussion with on topics such as client risk and economic modeling. We are working very closely with Gauntlet to put together a mathematical and statistical framework on how to look for AVS’, expected payouts, and the risks of slashing. This has been very difficult as the numbers need to exist to make a conclusion on how those risks will look. A lot of this has been mapped out for beacon chain staking but this data doesn’t exist for EigenLayer so we expect to start with a hand curated process and eventually move over to a more rigorous framework that uses statistics to assess the risk of each AVS."
— Abi, Swell
Can you introduce the collaboration between Swell and Ether.fi and discuss why the pool makes sense?
"The main reason we launched the pool is because we recognise that with all the current hype around farming EigenLayer Points, LPing in an LRT pool sucks because 50% of your pool becomes WETH or another LST, meaning from a pools perspective you lose out on half your EigenLayer Points. This is why we set up this pool. weETH is a wrapped version of Ether.fi’s LST which reprices in a similar way to rswETH. This allows us to keep the pool concentrated while also taking advantage of Curve’s stable swap pools and oracle feature which moves the liquidity in the pool inline with the repricing oracle of each LRT."
— Abi, Swell
"Users get a better experience and you have more stability on the LRTs so now you have great liquidity on both Swell and Ether.fi tokens and users get to farm points at the same time."
— Mike, Etherfi
What is the future of this pool and what will users be able to do with Curve LP tokens?
"We are currently working on deploying this pool on Pendle and Timeless Finance. They both have YT and PT style tokens and there will be a similar interaction between the two."
— Abi, Swell
Curve Pool FAQs
1. Can I single-side deposit in the pool and still receive all 3 points?
Single-sided deposits are possible but may not be recommended as it may swap your LRT into the asset that is imbalanced in the pool, resulting in unnecessary slippage.
Whatever the composition of your LP, as long as you are in the pool you are earning points from Swell, Etherfi and EigenLayer.
2. Where will each of the different Points be shown?
EigenLayer Points will be added retroactively for both Swell and Etherfi depositors. You can currently view your Swell Voyage Pearls on the Voyage dashboard.
3. Will users get the same amount of EigenLayer Points from the pool as opposed to depositing LSTs in EigenLayer?
Yes, roughly, but it may be the case that LRTs earn 3-5% less EigenLayer Points due to the wait time for a validator to become active on the beacon chain.
4. What are the risks associated with LRTs?
The more layers of staking you add, the more risk you take on. There is also added smart contract risk when LPing in Curve as you are depositing your token into another protocol.
Swell is very careful when it comes to security and we take the necessary precautions to deliver the product in the safest state that we can. rswETH has been audited by Sigma Prime, as has our LST swETH.
Thanks to everyone who attended the event!
To stay up-to-date with Swell, join our thriving community on Discord, Farcaster, DeBank, and X.
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