Swell Network has rapidly emerged as a major force in the liquid staking and restaking space, achieving a Total Value Locked (TVL) of over $1.5 billion following the launch of its innovative user engagement campaigns. Through strategic initiatives like The Voyage and Swell City, the protocol has cultivated a vibrant community, incentivized long-term participation, and expanded its ecosystem across multiple DeFi platforms.
This deep dive explores how Swell leveraged gamified incentives, liquidity mining, and layered reward mechanics to drive growth—while analyzing potential returns for participants and what lies ahead with its upcoming token launch and Layer 2 expansion.
Understanding Swell: Liquid Staking Made Simple
Imagine you have Ethereum (ETH) sitting idle in your wallet. Instead of letting it gather digital dust, Swell lets you stake it securely and receive swETH, a liquid staking token that appreciates in value as staking rewards accrue.
But Swell doesn’t stop there. You can use swETH across decentralized finance (DeFi) protocols to earn additional yields—essentially "restaking" your assets for compounded returns. To encourage adoption, Swell introduced a points-based rewards system called Pearls, which users earn by staking, providing liquidity, referring others, and engaging with the ecosystem.
These Pearls act as eligibility markers for future $SWELL token airdrops—creating a powerful incentive loop that fuels both user growth and network security.
The Voyage: Building Momentum Through Gamification
Launched on May 24, 2023, The Voyage was Swell’s first major campaign designed to boost TVL, deepen liquidity, and foster community ownership. It ran until July 30, 2024, and laid the foundation for Swell’s explosive growth.
Core Objectives
- Increase Total Value Locked (TVL)
- Encourage long-term staking and DeFi integration
- Reward active community participation
- Expand swETH adoption across chains and protocols
Participants earned White Pearls through various actions, with 8% of the total $SWELL supply allocated to reward early adopters.
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Chapter 1: Launching the Journey (May – August 2023)
In the initial phase, users could earn Pearls via:
- Minting swETH: 20 Pearls per swETH minted
- Holding swETH: Ongoing rewards based on amount and duration
- Providing Liquidity (LPing): Higher Pearl yields when depositing swETH into supported pools on Balancer, Aura, Pendle, and others
A key innovation was the 50,000 ETH TVL Milestone Bonus—if collective staking reached this threshold, all Pearl earnings would increase by 40%. This created a shared goal that unified the community and drove mass participation.
By the end of Chapter 1, Swell’s TVL surged from just $31,000 to $80 million—a testament to the effectiveness of well-structured incentives.
Chapter 2: Scaling Engagement (August 2023 – July 2024)
Building on early success, Swell introduced new mechanics in Chapter 2:
Referral Program
- Users generated unique links; both referrer and referee earned 10 Pearls per swETH mint.
- Anti-abuse measures prevented self-referrals and looping exploits.
Discord Role Bonuses
Active community members received one-time Pearl bonuses:
- Swell OGs: 400 Pearls
- Submariners: 200 Pearls
- Navigators: 100 Pearls
- Divers: 50 Pearls
Additional rewards were given to:
- Gitcoin donors: 300 Pearls
- Swell Diving Club members: +40 Pearls
- Early participants from pre-launch phases: up to 500 Pearls
This multi-tiered approach ensured that not just large stakers, but also engaged contributors were recognized.
Swell City: The Next Evolution
Launched on August 1, 2024, Swell City succeeded The Voyage as the ongoing engagement engine. It shifted focus from one-time accumulation to sustained participation, introducing dynamic rewards through Wavedrops.
Key Features
Restaking with rswETH
Users can now deposit ETH to mint Restaked Swell Ether (rswETH)—expanding beyond simple staking into restaking infrastructure.
Each new rswETH mint earns 30 Pearls, with ongoing rewards for holding or using it in DeFi.
Black Pearls & Wavedrops
- Earn Black Pearls by holding swETH, rswETH, or swBTC and using them in integrated protocols.
- Wavedrops occur every 10 weeks, allowing users to claim $SWELL tokens based on accumulated Pearls.
Loyalty & Multiplier Mechanics
- Consecutive Wave Bonus: Up to 60% boost after six consecutive Wavedrops
- Snapshot Loyalty Bonus: Users maintaining ≥90% balance from July 30, 2024 get a 30% boost
- L2 Staking Bonus: Deposits on Swell’s upcoming Layer 2 receive a 1.5x multiplier on future airdrops
These mechanisms are engineered to retain users and align long-term interests with protocol growth.
Airdrop ROI: What Early Participants Can Expect
While the official $SWELL token has not yet launched, pre-market trading of White Pearls offers insight into potential returns.
Assumptions
- ETH price: $2,000
- Average gas fee: $10 per transaction
| Engagement Level | ETH Locked | Estimated Pearls | Market Value (at $0.1/pearl) | APY |
|---|---|---|---|---|
| Minimal (1 ETH) | $2,010 | ~80 | $8 | 0.34% |
| Typical (10 ETH) | $20,060 | ~650 | $65 | 0.27% |
| High (100 ETH) | $200,260 | ~6,740 (+9,436 with bonus) | $674–$944 | 0.28–0.40% |
At peak pre-market prices (~$0.5 per Pearl), ROI jumps significantly:
- Typical participant: ~1.36% APY
- Top-tier user with bonus: up to 1.98% APY
While these returns may seem modest compared to high-risk yield farms, they reflect low operational risk and non-custodial security—appealing to conservative DeFi users.
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Community Sentiment & Challenges
Despite impressive growth, community feedback remains mixed:
- Many praise Swell’s transparent design and long-term vision.
- Others express frustration over the delayed token launch and lack of clear distribution timelines.
- Pre-market Pearl trading has emerged on X (Twitter) and Discord, indicating strong anticipation.
However, Swell’s introduction of Swell City helped mitigate concerns by offering continued engagement pathways instead of abrupt campaign closure.
Looking Ahead: Layer 2 and Ecosystem Expansion
Swell is preparing to launch a dedicated Layer 2 network for restaking, aiming to reduce fees and improve scalability. Early data shows over 50,000 depositors already participating in pre-launch activities—signaling strong demand.
By integrating swETH and rswETH into L2 ecosystems, Swell positions itself at the forefront of the next wave of Ethereum innovation.
Frequently Asked Questions (FAQ)
What are Swell Pearls?
Pearls are points earned by staking ETH, using swETH/rswETH in DeFi, referring users, or participating in community roles. They determine eligibility and reward size for future $SWELL token airdrops.
How do Wavedrops work?
Wavedrops distribute $SWELL tokens every 10 weeks based on accumulated Black Pearls. Consistent participation increases rewards via loyalty multipliers up to 60%.
Is there a minimum requirement to qualify for the airdrop?
There is no public minimum threshold. However, meaningful participation—such as staking, LPing, or referrals—increases Pearl accumulation and potential rewards.
Can I still earn Pearls now?
Yes. The Swell City campaign is ongoing. Users can earn Black Pearls by staking ETH into swETH or rswETH and using them across supported DeFi integrations.
What is rswETH?
rswETH is Restaked Swell Ether—generated by depositing ETH into Swell’s restaking vaults. It enables participation in multiple validation layers, enhancing yield potential and ecosystem security.
When will the $SWELL token launch?
No official date has been announced. The rollout is expected to occur gradually via Wavedrops tied to Swell City participation.
Final Thoughts
Swell Network has demonstrated a masterclass in community-driven growth through carefully structured incentives. By combining liquid staking with gamified rewards, restaking capabilities, and layered loyalty programs, it has built a resilient ecosystem poised for long-term relevance.
As the DeFi landscape evolves toward modular infrastructure and restaking primitives, Swell’s strategic roadmap—including its upcoming L2 launch—positions it as a key player in shaping Ethereum’s next chapter.
Whether you're a casual staker or an active DeFi participant, staying engaged with Swell City could yield significant rewards when the $SWELL token finally drops.
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