Restaking: a reliable source of yield on bitcoin?

Yield on bitcoin has historically been hard to come by.

Despite being widely thought to be the most secure and decentralized cryptoasset, the asset offers no native yield. Revenue earned by miners is used for sustaining the resource-heavy process of Proof of Work, rather than passed on to stakers as with Ethereum's Proof of Stake, and other opportunities such as lending tend to offer low rates with added risk.

The emergence of restaking now offers an exciting alternative, and one that with careful risk management and security could be the first sustainable source of yield on bitcoin.

What is restaking?

New restaking protocols — such as Symbiotic, Eigenlayer, and Babylon — enable assets such as BTC and ETH to be pledged to secure distributed protocols, enabling them to decentralize without needing ro run their own nodes. In return, restakers earn yield for providing their assets as cryptoeconomic security. Liquid restaking takes this one step further, providing restakers with a receipt token — a tokenized version of the restaked asset that accrues yield and can be either held in a wallet or used in DeFi to further boost yield.?

Introducing Swell Restaked BTC (swBTC)

The restaking economy is still taking shape, with the first restaking protocols beginning to mature and the first trickles of real restaking rewards starting to flow. Swell's swBTC gives bitcoin holders a way to capitalize on this growing source of yield with top-tier security and best-in-class risk management.

Risk managed yield

Leading DeFi risk manager Gauntlet acts as a Restaking Guardian for swBTC, carefully selecting restaking strategies and markets to optimize risk-adjusted vault performance.

Battle-tested infrastructure

swBTC is built on Yearn v3, the blue chip DeFi protocol that has been thoroughly battle tested since launching in 2022. Swell's changes to the vault were audited by smart contract security experts Nethermind and ChainSecurity.

Built on WBTC

The largest and most widely-used form of bitcoin on Ethereum, WBTC has been operating successfully for more than five years. The underlying bitcoin is custodied with BitGo, which recently upgraded its custody arrangement to distribute the multisig keys to the bitcoin across multiple jurisdictions: The United States, Hong Kong, Singapore (1 per location) and between different institutions in a multi-jurisdictional, multi-institutional 2 of 3 cold-storage multi-sig.

Restake WBTC today to start earning

Real restaking rewards are expected to start flowing later this year, when the first underlying restaking protocols enable yield.

Until then, you can deposit WBTC in Swell to get swBTC and earn 3x Black Pearls (300 Pearls per BTC per day) in addition to Symbiotic Points. Black Pearls will be used to claim SWELL tokens at the first Wavedrop in October. In addition, you can also deposit swBTC in the Swell L2 Pre-Launch to earn airdrops from the Swell ecosystem at a 1.5x multiplier, and can juice your swBTC yield in pools on PancakeSwap and Curve.

Got questions about earning restaking yield with swBTC?

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