Swell Ethereum (SWETH)

Liquid Staking and Restaking

Swell Ethereum allows users to stake their ETH and receive liquid tokens like swETH or rswETH. These tokens represent staked ETH plus rewards and can be used in decentralized finance (DeFi) applications. This means users earn staking rewards while still having liquidity to trade, use as collateral, or provide liquidity in DeFi.

Dual Rewards and Security

By restaking ETH through Swell, users can earn both Ethereum staking rewards and additional rewards from securing other services (Actively Validated Services or AVSs) on the EigenLayer protocol. This dual reward system helps improve network security and offers more earning opportunities.

DeFi Integration and Capital Efficiency

Swell Ethereum tokens can be traded on decentralized exchanges like Uniswap, PancakeSwap, and Balancer. The tokens enable participation in DeFi activities such as lending, borrowing, and yield strategies, enhancing capital efficiency without locking up ETH.

Layer 2 and Ecosystem Support

Swell Network includes a Layer 2 rollup called Swellchain, which offers fast, low-cost transactions and integrates restaking rewards into transaction fees. This supports a growing ecosystem of DeFi apps and services that leverage restaked ETH.

Governance and Community

The SWELL token supports decentralized governance, allowing holders to vote on protocol decisions, fees, upgrades, and incentives, helping shape the future of the Swell ecosystem.

In summary, Swell Ethereum is used to stake ETH while keeping it liquid for DeFi use, earn multiple rewards through restaking, participate in a fast and efficient Layer 2 network, and engage in community governance.

Pros

• Swell Ethereum offers liquid staking tokens (swETH and rswETH) that let users earn staking rewards while keeping their tokens liquid for use in DeFi activities like lending and yield farming.
• It lowers the barrier to entry for staking by allowing staking with as little as 1 ETH, compared to the usual 32 ETH required to become a validator.
• Swell vaults provide extra yield by operating like Yearn vaults, integrating DeFi conveniently into the staking experience.
• The protocol supports restaking, which allows staked assets to secure additional services, increasing potential rewards.
• Swell uses decentralized governance through the Swell DAO, empowering users to participate in decision-making and protocol development.
• It has strong security measures, including continuous audits and bug bounty programs.
• Swell integrates with Ethereum Layer 2 solutions to improve scalability and transaction efficiency.
• The platform fosters a strong community through programs like The Voyage, encouraging user engagement and education.

Cons

• The minimum staking amount of 1 ETH is higher than some competitors like Rocket Pool (0.01 ETH) and Lido (no minimum).
• There have been concerns about volatility and potential security risks common in DeFi, such as hacks or rug pulls.
• Some features like Earn Vaults have been shut down due to changes in partner protocols and limited usage.
• As a relatively new and evolving protocol, it may face challenges related to adoption and competition in the liquid staking space.

Founders of Swell Ethereum

The founders of Swell Ethereum are Daniel Dizon and his team. Daniel Dizon serves as the CEO and lead figure behind the project. His leadership has been key in developing and launching Swell Ethereum, focusing on liquid staking and restaking solutions within the Ethereum ecosystem.

Investors in Swell Ethereum

Swell Ethereum is backed by several reputable investors including venture capital firms and angel investors. Key investors are:

• Venture Capital Firms: Framework, 105G Ventures, Apollo Crypto, Maven 11, BIXIN Ventures, IOSG Ventures, Apollo Capital.
• Angel Investors: Mark Cuban, Kain Warwick.

These investors participated in funding rounds such as the $3.75 million seed round co-led by Framework, IOSG Ventures, and Apollo Capital. The backing by these well-known investors supports Swell Ethereum’s mission to lower barriers for Ethereum staking and enhance liquidity for stakers.

Halal Status of Swell Ethereum

• General Ethereum Halal Status: Most Muslim scholars consider Ethereum and its native token Ether (ETH) halal because it functions as a utility token powering decentralized applications and smart contracts without involving interest (riba) or unethical activities.
• Staking and Liquid Staking: Staking ETH, including liquid staking as done on Swell Ethereum, is generally viewed as halal when the rewards come from transaction fees and network validation, not from lending or interest. This is because staking contributes to network security and decentralization.
• Swell Ethereum Specifics: Swell Ethereum is a liquid staking platform that allows users to stake ETH and earn rewards by helping validate the Ethereum network. Since it aligns with the halal principles of earning through participation and not interest, it is considered halal.
• Scholarly Consensus: Prominent Muslim scholars and Islamic finance experts have issued positive opinions on Ethereum and ETH staking, supporting its permissibility under Shariah law when done ethically.

Answer: Yes, Swell Ethereum is halal because it involves staking ETH to support the network and earn rewards without interest or unethical practices.