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Trending Project: StakeWise (SWISE)

StakeWise is poised to shake up the liquid staking landscape with the launch of V3.
Ben Giove Ben Giove Feb 1, 20232 min read
  1. Ticker: SWISE
  2. Sector: Liquid Staking
  3. Network: Ethereum
  4. FDV: $100M
  5. Hotness Rating: 🔥🔥🔥

Tl;dr: StakeWise is poised to shake up the liquid staking landscape with the launch of V3.

StakeWise is a liquid staking protocol. In the current iteration of the protocol, StakeWise V2, users can stake their ETH to receive two tokens: sETH2, which represents a claim on their underlying deposit, and rETH, a token that accrues staking rewards. The protocol generates revenue by taking a 10% cut of staking rewards and is governed by the SWISE token, which is also used to incentivize liquidity for sETH2. StakeWise currently has a 0.45% market share of all staked and a 0.9% share among liquid staking protocols.

Source: StakeWise V3 Announcement Post

StakeWise recently announced their plans to launch StakeWise V3, a revamp of the protocol. V3 will introduce a completely new architecture where users can stake ETH into isolated vaults run by individual node operators (NOs). Users who do so will receive an NFT that represents a claim on their deposit, which they can use to mint an LSD, osETH, at a pre-set collateral factor (CF) based on the value of their deposit.

The management of an osETH position will work similarly to a CDP, as users will be required to maintain a high-enough CF to avoid liquidation while also paying a stability fee to the StakeWise DAO). V3 is set to benefit stakers, who are able to select which validator they choose (isolating their risk), as well as node operators who can permissionless validate for the network. Per their Discord, StakeWise V3 is slated to launch on testnet in Q4 and mainnet in early 2023.

SWISE/ETH - Source: DexScreener

The price of SWISE has fallen 12.2% against USD and 9.7% against in the ~6 weeks since the merge. This decline can likely be attributed to broader market weakness as well as sell pressure from token emissions, as SWISE is being used to incentivize liquidity for sETH2 pairs.

SWISE Smart Money Balances - Source: Nansen

Despite this underperformance, savvy investors have continued to accumulate the token, with Nansen Smart Money balances up 14.95% in the past three months. Furthermore, the DAO has discussed revamping tokenomics after the launch of V3 to potentially include a revenue share model.

Hotness Rating (🔥🔥🔥/5):

While the token has underperformed of late, StakeWise has numerous upcoming catalysts including the launch of V3, staking withdrawals being enabled in the Shanghai network upgrade, and a potential tokenomics upgrade. Although emissions may suppress price in the interim, investors would be wise to keep SWISE on their radar.

Ben Giove

Written by Ben Giove

95 Articles View all      

Former Senior Analyst at Bankless.

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