Swell Airdrop

Problem Solved

Swell's first airdrop campaign, called Voyage, provided Swell stakers with the opportunity to collect White Pearls, representing their contribution to the Swell ecosystem. Following the conclusion of the Swell Voyage in July, a new recurring campaign was launched, called Wavedrops. Each wave lasts for 10 weeks and during this period users can farm Black Pearls that can be redeemed for $SWELL tokens at the end of each Wavedrop. Kieran Smith, Swell's CMO further explains:

"Pearls represent ownership of the Swell protocol. White Pearls were collected on the Swell Voyage, our journey to find decentralization under the sea at Swell City, and will be used to claim $SWELL at TGE soon. Black Pearls on the other hand can still be collected and used to claim $SWELL at Wavedrops every 10 weeks."

Swell aims to solve the problem of poor user experience and complexity in the existing liquid staking and restaking landscape. While liquid staking and restaking are already present in the market, they often have fragmented interfaces and are difficult for users to navigate effectively, particularly for those new to DeFi. Swell addresses this by providing a streamlined platform with a strong UX that simplifies both staking and utilizing liquid tokens in further DeFi strategies.

Additionally, with the introduction of its L2, Swell seeks to optimize transaction efficiency and broaden utility for these liquid tokens, making staking and restaking more accessible and profitable for a wider audience.

Tokenomics

The $SWELL token serves as the native token of the Swell platform, used for gas fees on the network, securing Swell L2 applications and infrastructure, and acting as a governance token for the Swell DAO. Although the team has yet to release detailed tokenomics, they have promised to provide this information before the TGE.

The total token supply is 10 billion, with 7% allocated for the Voyage airdrop program and 1.5% set aside for stakers through the Loyalty Bonus program. Notably, 99.7% of rewards distributed in the Voyage campaign are not subject to vesting, while the remaining 0.3%, held by the largest participants, are subject to a vesting plan that has not yet been publicly disclosed.

Perspectives

Swell is well-positioned to capture future market opportunities by addressing the growing complexity in liquid staking and restaking. For experienced users, Swell provides an efficient way to execute sophisticated yield-maximizing strategies across multiple protocols. At the same time, it caters to less experienced users by allowing them to simply stake or restake ETH in a “set it and forget it” manner.

This user-friendly approach is particularly important as the market becomes saturated with complex options, often overwhelming users. Swell's focus on improving UX and simplifying access to staking and DeFi protocols is a strong move that can help attract a wider user base and increase adoption going forward.

Founders and Team

Swell was established by Daniel Dizon in 2022, marking his first venture into the Web3 space. Despite being relatively new to the industry, both Dizon and his team have made significant strides in a short period. The team consists of around 20 members, many of whom are also experiencing their first involvement in Web3. However, the collective skillset and experience across various fields have proven effective in driving the project’s development. Swell’s rapid emergence as a popular DeFi platform demonstrates the team's ability to execute and adapt, even in the highly competitive and evolving blockchain environment.

Funding

Swell recently received a performance-driven grant from Polygon Labs for the successful integration of liquid staking and restaking tokens into the Polygon ecosystem. The project raised a single notable funding round in 2022 with limited venture capital participation, making it unclear whether Swell has the financial resources and connections needed for long-term growth.

However, with close to $1 billion in deposits from over 50,000 users, Swell'. This suggests the project may be able to sustain itself through user-generated revenue rather than relying solely on investor funding, positioning it for continued development.s traction demonstrates a solid revenue base

Community

Swell has a sizable community with 90k followers on X (Twitter) and close to 40k members on Discord. However, despite being recognized as a successful DeFi platform, the community engagement appears low. The project's posts on X typically generate fewer than 100 likes, which is inconsistent with its large follower count.

Additionally, the Swell Discord is currently closed to new members, potentially deterring new users from engaging with the platform, as it limits opportunities for communication with both the team and existing users. Improving community interaction and accessibility could be key to driving further user growth and engagement.

Competitors

In the ETH liquid staking space, Swell faces competition from numerous DeFi projects experimenting with liquid staking and restaking. Lido leads the market with its emphasis on reliable node operators, while Rocket Pool is regarded as a strong alternative, valued for its decentralized approach. To compete, Swell seems to focus on improving user experience. For example, while other protocols can be just an app for staking ETH and receiving a corresponding token, Swell can also provide an interface for with further DeFi strategies that allow a user to utilize their LST and LRTs immediately.

In addition to staking, Swell is entering a broader and more challenging competitive landscape by building its own L2. The current L2 ecosystem has become crowded due to the ease with which developers can launch chains, leading to an oversupply. While many L2s can coexist, not all will thrive. It is reasonable to expect the market share to concentrate around a few successful L2s, while the rest risk becoming irrelevant.

Swell has generated impressive early interest, with $1B TVL and 50k depositors pre-mainnet, but its long-term success hinges on the quality of applications that are built on the L2, rather than just the TVL. While Swell can incentivize and support developers, the critical network effects required for success are largely outside its control. However, it is also worth noting that Swell's focus in liquid staking and restaking does give their L2 chain a niche that's not fully explored by competing L2s.