Swell Launches Liquid Restaking Token As LRTs Boom

Liquid restaking protocols surpass $900M or 45% of EigenLayer’s TVL.

By: Samuel Haig Loading...

Swell Launches Liquid Restaking Token As LRTs Boom

The burgeoning liquid restaking sector continues to grow, with Swell becoming the latest project to launch a token offering yields via EigenLayer.

On Jan. 29, Swell announced the launch of rswETH, a liquid restaking token (LRT). The token allows users to earn Ethereum staking rewards and native restaking yield from EigenLayer without locking up their liquidity, meaning users can also use their tokens in third-party DeFi protocols.

Tokenholders also earn EigenLayer’s Restaked Points alongside Pearls — which represent a future claim to Swell’s forthcoming SWELL token. Swell will accumulate 10% of users’ staking rewards after taking zero fees for the first 30 days after rswETH’s launch.

Swell currently boasts $455.6M in total value locked, according to DeFi Llama, with its liquid staking token (LST) accounting for 97% of the TVL.

Liquid restaking

Swell’s entrance into the LRT segment follows liquid restaking recently emerging as a hot new narrative within DeFi.

EigenLayer pioneered restaking, allowing users to earn Ethereum staking rewards in addition to restaking yields for securing third-party services via the protocol. EigenLayer users generate yields either by natively restaking ETH via the protocol without limit or by depositing LSTs to the protocol’s capped pools. More than $2B worth of ETH is now deposited in EigenLayer.

LRT providers offer the benefits of uncapped access to EigenLayer restaking rewards without users having to spin up a node to validate Ethereum, in addition to allowing tokenholders to remain liquid rather than lock their assets.

The surging rise of LRTs

EtherFi is currently the leading liquid staking protocol, with its eETH token surging to a $507M TVL after growing 400% since the start of January.

EtherFi’s TVL is up 47% since launching a vampire attack intended to siphon liquidity from EigenLayer on Jan. 24. The campaign allows EigenLayer restakers to swap their ETH or LST deposits for eETH while sidestepping the seven-day delay on withdrawals. Participants also earn loyalty points ahead of EtherFi’s token generation event in April.

KelpDAO has emerged as the second-largest LRT with a $256M TVL after launching in December. KelpDAO boasts integrations with LSTs from Frax and Stader.

Renzo is also a prominent LRT protocol with a $155M TVL. The project announced the completion of a $3.2M seed round.