Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
This week, we cover three new liquidity pool strategies in collaboration with Swell Network’s new native LRT, rswETH. Having covered LRTs (liquid restaking tokens) previously, this will be a simple tutorial building upon what we’ve learned with eETH by ether.fi, the first LRT to recently achieve over $1B in ETH deposits as well as ezETH by Renzo Protocol.
Launched in spring 2023, Swell Network quickly rose among the ranks of newer ETH LSTs. Swell is a non-custodial staking protocol aiming to offer “the best liquid staking and liquid restaking experience in DeFi.” Today, Swell’s flagship LST swETH has $666M in ETH deposits while its new LRT rswETH has just under $44M.
Their new LRT rswETH offers familiar benefits to what we enjoy with eETH and ezETH as native liquid restaking tokens:
- No caps or time constraints to ETH deposits
- Passive DeFi yields to earn
- Points to earn towards a future retroactive airdrop (Swell Pearls)
To mint rswETH by Swell, users deposit ETH here on the Swell restaking app in just 1 transaction.
A part of rswETH’s growth strategy appears to be building liquidity for rswETH with other major LRTs such as eETH by ether.fi ($1.12B in ETH) and ezETH by Renzo ($290M). Swell recently launched 3 liquidity pools where LPs can earn a combination of Swell Pearls, LRT protocol points, staking yield, trading fees, and EigenLayer Points.
- rswETH-weETH Curve LP, earn with 2 LRTs + EigenLayer Points
Source: Tweet
- rswETH-weETH Maverick LP, earn with 2 LRTs + EigenLayer Points + 2x Maverick Points
Source: Tweet
- rswETH-weETH-ezETH Balancer LP, earn quadruple points with 3 LRTs + EigenLayer Points
Source: Tweet
Today, I’ll cover how I can deposit into any of these 3 LP strategies and which is my favorite.
How to Earn with a Multi-LRT Liquidity Pool
Before we get started, please be aware of these risks.
- Smart contract risk in ether.fi, Renzo, Swell, EigenLayer, Curve, Maverick, and Balancer
- Front-end spoof attack on any app frontend
- An economic design exploit in the design of any LRT
- Pegged tokens such as LRTs can depeg but it’s unlikely given the ability to withdraw from them
- Colluding signers on any multisig for LRT protocols yet to tokenize governance such as ether.fi, Swell, or Renzo
Here’s how I get started!
- First, I should consider which LRT protocols I want exposure to. If I want to earn points in all 3 (Swell, ether.fi, and Renzo) I’d opt for the Balancer pool. But if I want to maximize trading fee yield and assume we’re closer to a Swell or ether.fi airdrop given they are older protocols than Renzo, then I might opt for the Curve or Maverick LP.
For me, I’m going to opt for the Maverick LP being the newest LP that could benefit from trading volume as new LPs swap prior to depositing into the pool.
- I go to the Boosted pool for weETH + rswETH here on Maverick and connect my Ethereum wallet. I can specify however much of either LRT and it auto-fills the amount for the other token before I follow the prompts to Add Liquidity And Stake.
- For Maverick, I need a specific portion of weETH + rswETH so I might need to trade for / mint those LRTs, and I can use the following tools:
- Swap on…
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
