Daniel Dizon is an Australian blockchain entrepreneur and tech investor who is the CEO and founder of Swell, a non-custodial Ethereum liquid staking protocol. ^[1]

Education

Dizon graduated with a Bachelor’s in Information Systems from Swinburne University of Technology. ^[2]

Career

Before founding Swell in 2020, Dizon was a Web2 founder who provided advisory services on blockchain digital assets to various government agencies in Australia and managed portfolios for corporate clients. ^[3]

Swell

In an interview with Brave New Coin from August 2023, Dizon says he was drawn to crypto because “the philosophical roots behind the original crypto thinking revolve around promoting freedom, self-sovereignty, and open finance, presenting a promise for what would likely be the future of the internet. The most logical place for that was in the Ethereum blockchain.” ^[3]

He then gave a high-level summary of what staking and liquid staking are and how they’re essential to Ethereum and DeFi as a whole, stating: ^[3]

“Staking is a method to secure the network. Ethereum transitioned to a fully Proof of Stake (POS) system in September of last year with the merge. This mechanism allows for the merging of existing blockchains, providing a way to secure the network. In exchange for securing the network or staking your ether, you earn rewards. Liquid staking enables earning rewards while reusing the collateral by rehypothecating it.”

“Advantage as well of liquid staking is that it abstracts away all the complexity of spitting up your own validator and managing that as well, so it reduces the technical hurdles and there's some financial hurdles as well that it sort of abstracts away so it's really easy for the user and should be a net benefit to the Ethereum existence because the more that's staked the higher the economic security is for Ethereum because it's more sort of costly to attack and that sort of thing.”

Dizon then explained Voyage, Swell’s incentive and reward program for early adopters: ^[3]

“We had the opportunity to examine what worked, what didn't, and why in the market, and how we could build upon that while introducing our own innovations. One such innovation was implementing a gamified community approach to bootstrapping liquidity. We created "The Voyage" to incentivize and reward early adopters of the protocol. Those who staked with Swell earned pearls, effectively a points-based campaign, which could later be exchanged for Swell tokens during our token generation event (TGE) to establish the DAO more effectively.”

He also commented on having high-profile supports backing Swell: ^[3]

“We're fortunate to have support from many individuals who have been part of the Ethereum ecosystem since its inception and have demonstrated their commitment as positive contributors. Starting a new device profile is always a challenge, but having such associations is beneficial. We've been deliberate in structuring this support as we aim for Swell to become a mainstay of DeFi, serving as a public good and utility for all in the Ethereum and crypto community.”

Centralization and Liquid Staking

Cointelegraph interviewed Dizon in November 2023, discussing Swell and his vision for the future of Ethereum liquid staking. The interview began with discussions about liquid staking being criticized for centralizing the Ethereum ecosystem. Dizon shared his thoughts, saying: ^[4]

“When multiple node operators are tied together — either operationally, politically, or through a liquid staking governance token — they are more likely to act as a single entity with outsized influence over Ethereum, threatening the values of these core qualities. This was first pointed out in Danny Ryan’s seminal paper, pointing out the dangers of “cartelization” and the drastic risks posed by a single dominant liquid staking protocol, and has since been echoed by the likes of Vitalik Buterin, who suggested that any protocol controlling more than 15% of all validators should be limited by social pressure.”

When asked how to mitigate centralization risks, he responded: ^[4]

“The best way to mitigate the risks of centralization is to create a diverse staking market consisting of multiple providers, each with a relatively small share of the market, all competing on a level playing field. The most effective way to achieve this is to offer better deals to liquid stakers.”

Dizon also shared the challenges he faced when he started Swell: ^[4]

“Swell is relatively late to the liquid staking scene, entering the market more than two years after the first successful liquid staking protocol, Lido, captured the majority of the market share. This could be seen as a problem, as the market can be seen as susceptible to first-mover advantage and winner-takes-most dynamics, where liquidity begets liquidity.”

“On the other hand, it also means that Swell has been able to learn from the mistakes of its predecessors. We’ve been able to make good design choices from the beginning: choosing a reward token model for fewer tax headaches and easy integration with decentralized finance (DeFi), focusing on creating the right ecosystem integrations to maximize the utility of our liquid staking token, and designing a simple staking interface that makes the process seamless for newcomers and crypto natives alike.”

He also shared how Swell differentiated itself on the market: ^[4]

“Swell is liquid staking for DeFi. Swell has built a strong presence in the market by focusing on gamification with the hunting of Pearls and the Swell Voyage and providing economic opportunities through more than 40+ DeFi integrations — accessible from within the app on the newly launched Earn page. As a result, we’ve built an active and fun-loving community — known as the Aquanauts — that has come together to stake their ETH, boost their yields, and support the security and decentralization of the Ethereum blockchain.”

Towards the end of the interview, Dizon shared his vision for Swell’s future development: ^[4]

“Since our launch, which flowed off the back of the Shapella upgrade, Swell’s core focus has ultimately been to maximize alignment with Ethereum. That means supporting permissionlessness, community-driven development, and a diverse liquid staking market. But also, it means creating an LST that maximizes economic freedom for holders by providing unparalleled opportunities in DeFi. In building the LST for DeFi, we aim to provide access to more economic opportunities in the fun ways only DeFi makes possible — with gamification, community and Pearls!”