Swell Strengthens Tokenomics with Fee Flow Auctions
Today we have launched Swell Fee Flow.
This auction mechanism takes SWELL used to purchase protocol revenue and burns it.
We are implementing this as part of a broader tokenomics overhaul—including the recent introduction of regular burns—to support the long-term sustainability of SWELL, and prepare for the launch of Voyager.
Introducing Fee Flow
Fee Flow is a mechanism that auctions off protocol fees using SWELL as the bidding currency.
Instead of holding the fees generated by swETH and rswETH in those assets, Swell will regularly auction them to the market in exchange for SWELL.
Fee Flows will take place at: https://app.swellnetwork.io/fee-flow
How It Works
1. Collection
Revenue accrues in swETH and rswETH from Swell’s staking products. In future, additional revenue sources—including Voyager fees—may also contribute to this pool.
2. Auction
Every 14 days, accumulated fees are sold through a Dutch auction.
- The auction starts at a high price
- The price gradually drops toward zero
- It ends when buyers step in and clear the supply
Anyone can participate (including arbitrageurs) for the chance to buy protocol revenue (swETH and rswETH) with SWELL at the clearing price.
3. Burning
SWELL received through auctions is then sent to a burn address, permanently reducing supply.
Why Fee Flow?
Fee Flow strengthens SWELL’s role at the center of the Swell ecosystem.
- Increased Utility for SWELL
SWELL becomes the exclusive asset needed to purchase protocol revenue.
- Unified Revenue Stream
Fee Flow simplifies treasury management by converting revenue generated across multiple products into a single token.
- Preparing for Voyager
Fee Flow creates a scalable mechanism to manage and convert future revenue from new products in the Swell ecosystem like Voyager.
Inspired by Euler
Fee Flow is inspired by Euler’s successful fee flow model, and adapted for Swell’s ecosystem and token structure.
Stay tuned for more updates on SWELL’s tokenomics as we build toward the launch of Voyager.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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