SSV and Swell Network | Delivering the Next-Generation of Ethereum Staking

Proposals Grants
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SSV and Swell Network | Delivering the Next-Generation of Ethereum Staking

1. Overview

Swell Network DAO (“Swell”) is seeking a grant to accelerate the delivery of a next-generation staking protocol by integrating with SSV Network. With a shared focus on principles of decentralisation, security, and innovation, Swell is strategically positioned to leverage synergies with SSV Network’s infrastructure to deliver value to each community and the wider ecosystem.

2. Vision and Background

Swell’s vision is to deliver the leading next-generation Ethereum staking protocol that is decentralised, liquid, and non-custodial. Importantly, Swell intends to utilise SSV Network’s infrastructure to provide its users, which span across both retail and institutional stakers, with the best possible ETH staking experience. Swell intends to utilise the grant to drive the development of Swell’s product roadmap which features integration with SSV Network.

Swell is supported by some of the industry’s most respected venture capital funds / firms and DeFi angels. These include Framework Ventures, IOSG Ventures, Apollo Capital, Maven 11, as well as several angel investors including Kain Warwick (Synthetix), Fernando Martinelli (Balancer Labs), Joey Santoro (Fei Protocol), and others. The core team is led by a highly capable co-founding team, both of whom have more than a decade of experience across finance, technology, and decentralised finance, with combined commercial and technical experience. The co-founders include:

  • Daniel Dizon (Co-Founder and CEO): Extensive experience in finance, technology, and start-ups. Exited software entrepreneur. Former strategic advisor to the Australian state government and Mayor of London on technology and innovation.

  • Lecky Lao (Co-Founder and CTO): Deep expertise in technology, product, and engineering. Serial entrepreneur. Experience includes leading DeFi projects such as Synthetix, dHedge, Instadapp, as well as corporate such as Telstra, Fujitsu, and IBM.

The team is currently focussed on achieving the following key objectives which are strategically aligned to SSV Network:

  • Providing a simplified, seamless, and user-friendly ETH staking experience, enabled by SSV Network.

  • Empowering users with liquid staking derivatives to enable higher risk-adjusted returns, which is supported by SSV Network’s distributed validator technology.

  • Enabling automation of compounded staking rewards which brings value to the wider ecosystem.

  • Leveraging containerisation to allow stakers to benefit from additional staking yield to other DeFi opportunities which helps the broader adoption and uptake of projects operating at both protocol and infrastructure layer.

  • Utilising the highest standards of security, risk management, and decentralisation, by leveraging SSV Network’s capability to support decentralised control and operations of Ethereum validators.

3. Synergy

Presently, Swell’s primary focus and specialism resides in enabling next-generation Ethereum staking through a decentralised, liquid, and non-custodial manner empowered by smart contracts, network design, and community governance. This is strategically aligned and wholly complementary to SSV Network’s distributed validator technology.

Given the synergy to both projects and their respective communities, Swell has collaboratively developed this grant proposal as an important first step to what Swell believes to be a mutually beneficial, valuable, and long-term partnership.

4. Progress To Date

Product: Swell has completed Swell V2 design and is moving into implementation. Swell V2 will enable decentralised, liquid, and non-custodial Ethereum staking, providing a differentiated and valuable offering to a large and growing market of ETH stakers and node operators. With Swell V2, the protocol will deliver liquid staking in a non-custodial manner enabled by atomic transactions. This will be altogether underpinned by higher headline yields through its innovative containerisation technology which allows the protocol to compounded DeFi yield strategies.

Integrations: As a core financial primitive for DeFi, Swell is continuing to build strategic partnerships and integrations across the DeFi landscape as part of its wider ecosystem approach. SSV Network, with its leading distributed validator technology is a priority partner for Swell’s innovative Ethereum staking offerings.

Partnerships: Swell has brought on a best-in-class group of strategic partners through its recent seed round which was backed by some of the leading DeFi venture capital firms, funds, and angel investors.

5. High-Level Roadmap for Leveraging SSV Network

Swell intends to implement a multi-phased, tightly-scoped, and agile / sprint-based approach to enable integration with SSV Network. At a high-level the following outlines the indicative / draft integration roadmap.

Phase 1 (Swell V2): Mar - May 2022

  • Designing validator evaluation and monitoring approach, including consideration to key parameters such as: network performance, experience, capability, geography, and more.

  • Developing a liquid staking derivative token and financial NFT mining for Ethereum leveraging SSV Network’s distributed validator technology. (Note: The financial NFT will serve as a container for liquid staked ETH and financial rewards associated with staking as well as compounding yield across the DeFi ecosystem.)

  • Developing underlying Swell network incentive design as part of overarching marketplace / platform model.

  • Enabling limited LP yield farming strategy to provide yields.

Phase 2 (Swell V3): June - Nov 2022

  • Enabling wide range automated compounding and containerisation of added yield farming to provide higher headline yields.

  • Extending to multiple third party validator nodes by leveraging SSV Network’s infrastructure.

  • Continuing ongoing partnerships and integrations as part of Swell’s ecosystem approach to drive further value and utility to Swell’s liquid staking derivative.

Phase 3 (Swell V4): TBD

  • Expanding to wider institutional settings including major funds, centralised exchanges, and other financial institutions.

  • Embedding wider regulatory, tax, and legal considerations within tailored product design for institutional users.

  • Developing medium and longer term strategies to support ongoing partnership and integration with SSV Network.

6. Grant Request

Swell anticipates the total cost of development for Phase 1 including relevant managerial and technical program management resourcing, frontend and backend development resourcing, as well as audit, to be in the vicinity of ~$300K to $350K USD. The requested grant amount from SSV Network for this proposal reflects a portion of this amount at $120K USD. This will cover the cost of 3x development resources and 1x audit. Other relevant costs will be borne by Swell.

6.1. Phase 1: Budget and Grant Schedule

Budget

Feature Description Budget (USD)
F1 Liquid derivative token (ERC-20) contract. $20K
F2 Staking contract that issues the financial NFT (ERC-721) contract. $50K
F3 Dapp to interact with the contract. E2E testing and optimising on SSV testnet. $25K
F4 Mainnet deployment, testing and E2E stabilisation. $25K
Total $120K

Overall, this grant will supplement existing resources dedicated to this effort. The funds will be utilised to ensure an effective and efficient integration. Swell is open and flexible as to the overall grant funding amount and terms.

Grant Schedule

As an initial proposal, Swell is seeking 40% of the funds upfront, followed by milestone based payments over the relevant staged approach. The Grant Schedule is indicated below:

Type Description Grant Drawdown (%) Funding Amount (USD)
Upfront Initial Payment 40% $48K
Milestone 1 Achievement of F1 15% $18K
Milestone 2 Achievement of F2 15% $18K
Milestone 3 Achievement of F3 15% $18K
Milestone 4 Achievement of F4 15% $18K

6.2. Phase 2 and Beyond

Swell will look to submit separate grant requests on an as-needs basis for Phase 2 and beyond.

About Swell

Swell is delivering the next-generation of Ethereum staking that is decentralised, liquid, and non-custodial. Swell will build a platform for both stakers and node operators. With Swell, stakers will be able to securely and seamlessly stake their ETH, earning attractive yields in a non-custodial manner and node operators will be able to leverage their financial and technical resources through Swell’s smart contracts. Swell intends to provide support for other Proof of Stake (PoS) networks in the medium term with the immediate and core focus being on Ethereum. To learn more about Swell Network, please visit the following links:

Discord: https://discord.com/invite/SeMQbGbeqC

Website: https://www.swellnetwork.io/

Twitter: https://twitter.com/swellnetworkio

1 Like
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Thank you for your proposal. But F1 and F2 are fundamental features in a staking dapps without integration of SSV IMO. I’m not sure whether they should be listed in the grant. Besides, Swell network hasn’t launched now, we are unable to confirm the actual status and security level of your project. So we should be more prudent.

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I did not find any institutional relevant investment information for Swell

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I think you can seek technical support if you want to integrate ssv, unless you have a sufficient number of pledged eth, and you can guarantee that you can use the ssv main network on the ssv main network. Otherwise, it would be a bit of a nonsense to need ssv dao to fund you. If this belongs to the necessary marketing expenses of the ssv network in the early stage, I also think that it is not possible to ask for money for a random project. That’s not how ssv dao money is spent.

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  1. This kind of start-up should not be invested in
    Wouldn’t it be nice to spend money on existing staking projects?
    To put it badly, the quality of the code of this kind of project is a problem, if there is a problem, it is not to lose the reputation of ssv
  2. Integrating ssv is a voluntary thing. Even if you need to pay for integration for the start of the ssv network, you would rather spend it on existing staking projects. At least the real money goes out, and finally eth can be pulled into the ssv main network
  3. If ssv still needs to spend money to be integrated after it is on the main network, then it is really necessary to reflect on the necessity of the existence of ssv network
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This is an unreasonable request

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1, how do you insure every feature will finish and delivery to ssv on time ? and qualified ?
2, if ssv pay for these feature ? will you delivery source code to ssv ? ssv pay for it and have ownership of these feature, right ?
otherwise Swell own that features, and that should not be paid by ssv, right ?

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Your proposal features looks same like Stader’s proposal, but Stader just apply total 120k budget .
And Stader is famous for it’s successful on Luna/ Terra chain.

Will you consider to revise your amount ?

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Hi SSV Community,

We thank you for your feedback and comments.

1.Our updated proposal to SSV Network is coming soon.

Overall, we strongly believe in the value of Distributed Validator Technology (DVT) and the broader synergy between Swell Network and SSV.

We understand where the SSV community is coming from and we will circle back soon with an updated proposal.

We are the first to acknowledge that there’s a lack of publicity and awareness around us given that we’ve been operating in stealth; however this will soon change and we are confident in the community alignment and win / win.

2. Swell is the fully non-custodial ETH staking platform to leverage atomic transactions.

Swell Network has already established several first-to-market innovations. This includes being the first truly non-custodial ETH staking platform via atomic transactions. This is live and on-chain . With Swell, your ETH goes directly into the deposit contract. In other words, staking with Swell means that your keys and your crypto are always yours. Our PoC is able to achieve this with each user depositing as little as 1 ETH.

3. Swell aims to be the first fully permissionless ETH staking platform to use SSV.

Swell believes that SSV / DVT represents a critical future infrastructure layer for the future of ETH staking. The importance of decentralisation, resilience, and security is enabled by SSV / DVT. To support these goals, it is vital that there be a strong presence of various network designs in the wider ecosystem with an emphasis on permissionless protocols.

With Swell being the second permissionless ETH staking protocol in the market according to internal research after Rocket Pool; we aim to be the first of our cohort to implement SSV. As part of our roadmap, Swell aims to be the first fully permissionless ETH staking platform to integrate SSV into our platform.

4. Let’s stay in touch

We will remain active in the SSV community. Here is the operator that we are running for the SSV testnet. We are aim to get verified on this very soon:

https://explorer.ssv.network/operators/7e80e9d607250ee398ab68d38931b12a3ebfbfba2740f33134d45c43bd3533ff

For Swell, a key capability within our product roadmap is leveraging the kind of Distributed Validator Technology (DVT) that SSV Network is building.

It is great to see such an engaged collection of folks who care about this important technology.

We will be sure to keep you all posted as we look to continue to bring value to SSV Network and the wider Ethereum ecosystem.

If you are interested in following Swell, you can connect with us at the relevant channels below.

Discord: https://discord.gg/uMm76CuG

Twitter: https://twitter.com/swellnetworkio

Thanks,

Swell Network DAO

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Hi SSV Community,

As promised, please find relevant updates to our proposal which specifically incorporates community feedback.

1. Updates for SSV Community

1.1. Seed Partners Announced

Swell Network DAO has announced its seed round across major respected media outlets, including CoinDesk, Yahoo Finance, and more.

Importantly, this highlights that Swell’s strategic partners reflect some of the best and brightest minds in decentralized finance and Ethereum more broadly.

We hope that this provides further reassurance as to the value of our proposal for your community. You can read more about what we have planned here and here.

1.2. Multiple Audits Completed

Since the original post, Swell has been audited by several firms to date (including Chainsulting, Slowmist, Peckshield and Certik).

We have further audits planned throughout the year and relevant reports will be made public. Our smart contracts bring several bleeding edge innovations to the fore, some of which are first-to-market.

Security is and will continue to be the highest virtue of our protocol and we hope this provides further confidence to the community as to our best practice DeFi product development involving next generation ETH staking.

1.3. SSV Integrated in Roadmap

For full transparency, the utilization of SSV / DVT has been listed in Swell’s internal Roadmap since Day 1 of the Project. We will be pushing ahead with our Roadmap as articulated in the original post given that our plans from inception has been to leverage that which is proven to reduce risk and promote performance across Swell Network as an emerging best-in-class ETH liquid staking protocol.

2. Further Value to the SSV Community

Since our original post, we have sharpened our focus with the help of our strategic partners and ongoing discussions with SSV. To this end, we underscore some key points of differentiation which will bring unique value to the SSV Community. (There are several “firsts” that we are driven to achieve in the near term which we believe will help the wider SSV Network ecosystem and Ethereum at large.)

They include, but are not limited to:

  • Being the first Ethereum staking protocol to enable node operators to set their own commissions with much crossover with SSV’s existing and future node operator partners.
  • Being the first Ethereum staking protocol to enable stakers to choose their node operator providing greater choice for stakers.
  • Being the first Ethereum staking protocol to provide a genuine white label solution for node operators as a core piece of complementary infrastructure to SSV.

Most importantly, we aim to be the first permissionless ETH staking protocol to integrate and leverage SSV. There is much in the way of potential future collaboration between Swell as a permissionless, non-custodial, and liquid ETH staking protocol and SSV as an open source, decentralized infrastructure staking project for Ethereum. All the above is enabled by SSV / DVT.

3. Immediate Next Steps

We have been speaking with the SSV Network’s Core Team, who have been extremely helpful in providing guidance for how best to showcase what we bring to the table. More information will be coming soon on this. We look forward to continuing to deliver value to the SSV Community.

Finally, if you are interested in following Swell Network, you can connect with us at the relevant channels below.

Discord: https://discord.gg/uMm76CuG

Twitter: https://twitter.com/swellnetworkio

Thanks,

Swell Network DAO

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Thanks for the updated content, Daniel. I think this looks like a great project, and I support providing a grant to aid your development and to help build a partnership.

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@danielswell thank you for updating everyone on your progress, I think we should take this conversation online for a community call + AMA if possible.
One of the key things we’ve learned is that the community wants to see the people behind the project.

I believe the SSV ecosystem will greatly benefit from you building on top of the network.

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Thank you @fod - much appreciated. We are very much interested in continuing our ongoing close dialogue and collaboration with SSV Network. We will continue to keep the community updated throughout this exciting journey,

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It is our pleasure @alonmuroch - that is great suggestion. Swell is always ready, willing, and able to have these conversations open and in a transparent manner for the SSV community. We also encourage as many questions as possible to ensure that we are maximizing the potential value of our synergy and receiving the right feedback to steer the direction of our collaboration. Looking forward to next steps and working with your team to get this happening.

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Hi SSV Community,

It’s been a while since we’ve provided an update and a lot has happened since, including “time” warping from a linear function to somewhat of an exponent. Below you can check out some of our updates and future plans on our roadmap, a lot will be happening over the next 6 weeks so be sure to hear from us a lot more often.

Updates for SSV Community

Testnet up and running on Goerli & Kaleido networks

For the past 6 weeks we’ve had our testnet running on Goerli and Kaleido, with quite a number of node operators and stakers testing the functionality of the dapp and providing very positive feedback for both the staking and node operating experience. Feel free to join our discord Swell Network to participate on our testnet https://app.swellnetwork.io/ we currently have a mainnet release candidate to test with.

Mainnet launch

During the next month the protocol will be executing a ‘soft launch’ on mainnet pre-merge. This will consist of allowing a very small group of node operators to add limited staking capacity and inviting a small group of potential stakers to fill that capacity, to test the protocol on the Ethereum chain and to bootstrap TVL. All things going well, we will officially launch the protocol targeting some time before the current merge date of 19th of September.

Token launch

We are also currently finalising our plans for a token launch that will occur after our protocol launch. Details of our tokenomics and distribution channels are still being finalised.

SSV integration

Working with the SSV team, we are in the process of working out how best we technically integrate SSV node operators to the protocol and what framework we will use to determine the reduced ETH collateral required for SSV operators utliising Swell Network. We are aiming to work this out and have it integrated before the SSV launch.

Further to this we are working out how to further strenghten our partnership with SSV by being on the committee for node operator verification. Stay tuned.

Other roadmap items

In our next major release we will be looking at adding two vaults Izumi and Aura and like everyone else we are busily preparing for the Merge.

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This may be an elementary question, but I understand swell has already raised several million dollars, and I’m not sure I understand why would would fund development with a grant rather than having been given the opportunity to invest in Swell in exchange for some SSV DAO equity or forthcoming Swell tokens?

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Hi SSV Community,

Great to see everyone on the other side of the Merge. I’ll give everyone a bit of a summary of the past two months, most updates have more detailed updates in the blog links.

Updates for SSV Community

August - Mainnet Launch

We successfully launched the protocol on main-net on the 23rd of August. The launch was a guarded launch, designed in stages to minimise staking risk with Stage 1 consisting of only 8 permissioned node operators with 1 validator each.

September - Stage 1 completion and post merge

The first stage was completed a day after the merge with all 8 validators staked. However whilst analysing validator performance we noticed an issue with two validators not activating with their 32 ETH deposits. We contacted the Ethereum foundation who advised it is a known edge case for final deposits. We have since deposited 1 ETH for each validator from our own treasury to force them to activate.

We are in the process of submitting a PR to the Ethereum consensus specs repository. And having been told it would most likely require an inclusion in the next hard fork we decided to remediate the issue itself.

October - Architecture update

As a result of the issue above we decided to pause Stage 2 of our guarded launch and staking indefinitely till we resolve the issue. We will be removing atomic (1 ETH) deposits to the Beacon Chain deposit contract and instead pool and submit 32 ETH deposits.

This smart contract change and other flow on changes will require some time for us to develop, test and get through the auditing process before we resume staking. We will be releasing a blog post sometime this week regarding this delay.

What’s next

For the protocol this setback is of course disappointing, however we want to make sure the our users and operator partners get the safest and most robust product, and we make no compromises but safety takes time.

We will update the SSV community when the issue has been resolved and staking is resumed again. Thanks for your patience

Team Swell

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Hi all,

Posting an update to the protocol, a couple of weeks ago we posted an announcement to our ongoing work regarding our architecture upgrade.

During the upgrade last year we conducted a very stringent analysis of our swNFT and atomic staking model and have decided that while it has a lot of benefits it also has a lot of trade-offs in being a highly experimental technology and ultimately wasn’t suited to the protocol’s goal’s and objectives.

As a result we’ve decided to adopt a more established, proven, and simplified model that will facilitate the growth and commercial outcomes the protocol is seeking in 2023. Specifically, we will be;

  • Shifting to a ‘staking pool’ model where risks and rewards are shared amongst all participants, stakers, node operators and the Swell DAO. This allows for more equitable staking distribution amongst operators and a simplified user experience.
  • Maintaining the set of operators beyond the guarded launch to be a permissioned set with a view to become permissionless.
  • Removing the 1 ETH collateral requirement for node operators to being 0 ETH.
  • swETH token will now become a reward bearing token whereby an exchange rate is used to capture the underlying value that’s in the consensus layer, as opposed to rebasing token.

What does this mean for our SSV integration

In short, Swell remains very committed to allowing permissionless operators aided by SSV, however due to the change we will be essentially going back to the drawing board to figure out how we do this using a staking pool.

Next steps

  • Examining how other staking providers with staking pools have used SSV in their various grants
  • Designing concepts for a way forward
  • Revise integration roadmap
  • Working with SSV to conduct POCs
  • Integrate with SSV post launch of both protocols.

We will provide an update next month with a possible revised roadmap with the assistance of the SSV team.

Please post any questions you may have we will be happy to answer.

  • Team Swell
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@cheezel_swell any update on it?