Swell Raises $3.75M as Locked ETH Tops $26B
Ethereum reached a major milestone last week in its highly anticipated transition to proof-of-stake, with 10 million ETH (about $26 billion) now locked in the Ethereum 2.0 staking contract.
ETH staking 101
Currently, it costs 32 ETH (about $82,000) to become a validator, though Swell and others are looking to lower that barrier to entry. Swell’s minimum commitment is 1 ETH. Significantly, the protocol will provide stakers with liquidity by granting them an interest-bearing token representing their stake.
Similar liquid staking solutions to Swell already exist – the most popular being Rocket Pool and Lido. Both products already make it easy for users to enter and exit their staking positions, and they allow minimum deposits much lower than Swell’s 1 ETH. Rocket Pool requires a minimum deposit of just .01 ETH, and Lido doesn’t have a minimum at all.
Swell says its main advantage is in making it easier for users to earn additional interest through in-app “vaults.”
“We do everything for the user,” Swell co-founder and Chief Technology Officer Lecky Lao said of the project’s vaults feature. “After they stake, they get an NFT they can optionally put into a vault if they want to get some extra yield from DeFi farming. Basically, we reduce the entry barrier for the beginner.”
Swell plans to launch its beta on the Ethereum mainnnet in April. Later, the company says it plans on expanding to other blockchains, starting with Avalanche and Polygon.
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