Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
This week, we dive into Swell’s newly launched Bitcoin LRT, which allows swBTC holders to earn restaking yield from Symbiotic, EigenLayer, and Karak.
Swell is known as a top non-custodial staking protocol offering the both liquid staking and restaking products.
Swell started with an ETH liquid staking token (LST) called swETH, later launched an ETH liquid restaking token (LRT) called rswETH, and more recently launched a pre-launch deposit campaign for Swell L2 under development. Swell L2 currently hosts $1.16B in deposits from 50k+ users.
swBTC is a yield-bearing ERC-20 that offers liquidity for users thanks to an automated vault that stakes wBTC across protocols like Symbiotic, EigenLayer, and Karak to generate yield and secure BTC DeFi.
Similar to their flagship LRT rswETH, swBTC holders will enjoy earning a restaking yield once these restaking platforms are fully live. swBTC holders will also enjoy the benefit of maintaining liquidity to participate in other DeFi such as the Curve swBTC/wBTC LP or PancakeSwap.
For now, swBTC is a mostly driven by a points meta rewarding holders with Swell Black Pearls, Symbiotic Points, and Swell L2 Ecosystem Points (for depositing in Swell L2). Deposits to Swell L2 with swBTC are expected to open as soon as this week but are still not available as of this post.
The Swell L2 will leverage deposited assets such as swBTC to secure critical infrastructure services for the rollup. Please note that there is still no points to earn from EigenLayer or Karak with swBTC but they are projected to be rewarded in the future to swBTC holders.
Today, I’ll cover how I can deposit wBTC into swBTC, and plan to later deposit swBTC into Swell L2!
How to Deposit wBTC into Swell’s swBTC and Earn Points
Before we get started, please be aware of these risks.
- Smart contract risk in any related protocols including Swell, Symbiotic, Karak, and EigenLayer
- Front-end spoof attack on any app frontend
- Oracle risks
- An economic design exploit
- Colluding signers on any multisig
- Systemic risk across DeFi
- While withdrawals are enabled for swBTC, there is still a risk of swBTC depegging and a 10-day delay to manually withdraw from swBTC
Here’s how I get started!
- Assuming I already have wBTC on Ethereum, I just go to the Swell swBTC app here and connect my Ethereum Mainnet wallet.
- I specify how much wBTC I want to deposit, click Deposit, and follow the prompts to confirm 2 transactions (Approval + Deposit).
That’s it! I can sit tight in my swBTC receipt token, earning Swell black pearls and Symbiotic points which will be rewarded retroactively and later displayed in the Swell app. I can follow Swell on Twitter/X here for updates on when swBTC can be deposited to Swell L2 and go here at a later date to deposit the swBTC to earn Swell L2 Ecosystem Points.
Also, it’s worth noting swBTC holders pay zero fees and fees will remain zero until real restaking rewards begin to flow on Symbiotic, Karak, and EigenLayer.
Follow me @DeFi_Dad on Twitter and subscribe to my YouTube channel and The Edge Podcast at defidad.com. If you’re a crypto builder raising capital, my DMs are open on Twitter.
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
