Swell Terms of Service

Last updated
September 26, 2024

1. Introduction and Acceptance of Terms

Welcome to Swell, a decentralized liquid staking protocol governed and operated by Overflow Foundation, a company incorporated in the Cayman Islands, located at:

3119, 9 Forum Lane
Camana Bay, George Town
Grand Cayman KY1-9006
Cayman Islands

("Company," "we," "us," or "our").

These Terms of Service ("Terms") constitute a legally binding agreement between you and/or the entity you represent ("User," "you," or "your") and Swell, governing your access to and use of the Swell website (https://www.swellnetwork.io), any related applications, and all services offered through Swell (collectively, the "Services").

By accessing or using the Services, you agree to be bound by these Terms and our Privacy Policy. If you do not agree to these Terms, you must not access or use the Services.

Important Notice: Certain Services are not available to persons or entities who are:

  • Located in, under the control of, or nationals or residents of any country subject to United Nations sanctions, United States embargo, or HM Treasury's financial sanctions regime, including but not limited to Belarus, Central African Republic, Cuba, Democratic Republic of Congo, Ethiopia, Iran, Iraq, Lebanon, Libya, Myanmar, North Korea, Russia, the regions of Crimea, Donetsk, and Luhansk, Sudan, Syria, Venezuela, Yemen, and Zimbabwe (collectively, "Restricted Territories").

If you are a person from a Restricted Territory, do not attempt to access or use the Services. Use of a virtual private network (VPN), provision of false or misleading documentation, or other means by persons from Restricted Territories to access or use the Services is prohibited.

Note: While U.S. users are generally permitted to access and use our Services, certain specific services remain restricted for U.S. users and residents of other prohibited jurisdictions. These restricted services include staking with Swell’s LST & LRT products and participating in the Voyage (S1 airdrop).

2. Definitions

  • "Digital Asset" means a digital asset or cryptocurrency, such as ETH, which is based on the cryptographic protocol of a computer network that may be centralized or decentralized, closed or open-source, and used as a medium of exchange and/or store of value.
  • "ETH" means ether, the native cryptocurrency of Ethereum.
  • "Ethereum" is an open-source, public, blockchain-based distributed computing platform featuring smart contract functionality.
  • "Liquid Staking" refers to the process of staking cryptocurrency while maintaining liquidity through a tokenized representation of the staked assets.
  • "MEV" or "Maximal Extractable Value" means the maximum value that can be extracted from block production in excess of the standard block reward and gas fees by including, excluding, and changing the order of transactions in a block.
  • "Platform Commission" means the commission charged by the Company in connection with the use of the Platform for the provision of Staking Services.
  • "Slashing" means the consequence of breaking specific protocol rules when submitting attestations or block proposals, which could constitute attacks on the chain; resulting in losing a significant amount of stake and being ejected from the protocol.
  • "Penalties" means the consequence for validators that do not fulfill their assigned duties and are penalized by losing small amounts of stake.
  • "Staking Node" means the collection of server hardware and software required to maintain a current copy of the blockchain for a Supported Digital Asset and to produce or validate new blocks on a Supported Protocol.
  • "Staking Rewards" means all Supported Digital Assets generated by operating Staking Nodes, including block rewards, transaction fees, MEV, and any other direct payments as a result of operating a Staking Node.
  • "Staking Service" means the liquid staking service provided by the Company.
  • "Staking User" means a user of the Platform who utilizes the Staking Services.
  • "Supported Digital Assets" means selected Digital Assets as may be determined by the Company from time to time.
  • "Supported Protocols" means selected proof-of-stake protocol(s) as may be determined by the Company from time to time.
  • "sw-Liquidity Tokens" means fungible digital tokens with the prefix "sw-" (e.g., swETH) minted when Supported Digital Assets are staked, representing ownership of the staked assets.
  • "Wallet" means a software program that stores private and public keys and interacts with various blockchains to enable users to send and receive digital currency and monitor their balance.

3. Eligibility and User Representations

3.1. Eligibility Criteria

To use the Services, you must:

  • Be at least 21 years old.
  • Not be located in a jurisdiction where digital assets are restricted or prohibited by law.
  • Not be the subject of, and are not under the control or ownership of a person that is subject to any sanctions administered or enforced by any country or government or international authority.

3.2. User Representations and Warranties

By using the Services, you represent and warrant that:

  • You meet all the eligibility requirements.
  • Your use of the Services does not violate any applicable law or regulation in your jurisdiction.
  • You are not located in, under the control of, or a national or resident of any Restricted Territory.
  • You are not the subject of any sanctions administered or enforced by any governmental or international authority.
  • You possess adequate financial and technical knowledge to understand the inherent risks associated with using cryptographic and blockchain-based systems and purchasing and holding cryptocurrency.
  • You are solely responsible for compliance with all applicable laws related to your use of the Services, including tax laws.

3.3. Prohibited Persons

You may not access or use the Services if you are:

  • The subject of any sanctions administered or enforced by any country or government or international authority.
  • Located, organized, a citizen, or resident in a country or territory that is the subject of sanctions.
  • Using the Services to conduct any illegal activities.

3.4. Specific Restrictions for Certain Services

While most of our Services are available to U.S. users and residents of previously restricted jurisdictions, certain services remain restricted, including:

  • Staking cryptocurrencies with Swell’s LST & LRT products and participating in the Voyage (S1 airdrop).

Users from the United States and other prohibited jurisdictions are not permitted to access or use these specific services.

4. Account Creation and Security

4.1. Account Registration

While some Services do not require account registration, certain features, such as staking and governance participation, may require you to create an account.

4.2. User Responsibilities

You are responsible for:

  • Providing accurate, current, and complete information during the registration process and updating it as necessary.
  • Safeguarding your account credentials and any activities or actions under your account.
  • Maintaining the security of your Wallet and your control over any Wallet-related authentication credentials, private or public cryptocurrency keys, NFTs, or cryptocurrencies stored in or accessible through your Wallet. By using a Wallet in connection with the Services, you agree that you are using the Wallet under the terms and conditions of the applicable third-party provider of such Wallet.

4.3. Notification of Unauthorized Access

You must immediately notify us of any unauthorized use of your account or any other breach of security.

4.4. Account Suspension or Termination

We reserve the right to disable or terminate any user account at any time, in our sole discretion, for any or no reason, including if, in our opinion, you have violated any provision of these Terms.

5. Description of Services

5.1. Platform Overview

Swell operates the Swell protocol, which is a liquid staking protocol comprised of a series of smart contracts that allow users to stake Supported Digital Assets to earn staking rewards.

The Services include:

  • Liquid (Re)Staking for Ethereum and other Supported Digital Assets.
  • Minting of sw-Liquidity Tokens representing staked assets.
  • Access to decentralized finance protocols and secondary markets for sw-Liquidity Tokens.
  • Website and web application usage.
  • Swell Governance Voting & Staking.
  • Participation in Wavedrops (S2 airdrop)
  • Swell Ethereum Layer 2.

5.2. Non-Custodial Services

Swell operates on a non-custodial basis. You retain full ownership and control of your digital assets.

  • The Company does not have custody over your assets, private keys, or Wallet access.
  • You are solely responsible for managing and securing your Wallet keys and ensuring the integrity of your transactions on the blockchain.

5.3. Staking Rewards and Risks

Users who stake assets through Swell may be eligible to earn rewards based on their staking participation.

  • Risks: Staking is subject to network risks, such as slashing penalties, validator downtime, and other unpredictable events on the underlying blockchain (e.g., Ethereum).
  • No Liability: Swell is not liable for losses incurred due to these risks.

5.4. Unstaking

You may request to withdraw all or any part of your staked Supported Digital Assets following some reasonable time after the applicable network upgrades.

  • When unstaking, you select the quantity and type of sw-Liquidity Tokens to be burned and redeemed, and the corresponding amount of staked Supported Digital Assets will be released to your Wallet.
  • Swell aims to process all unstaking requests promptly, contingent on the limitations of the underlying blockchain, including withdrawal queues.
  • The Company may impose unstaking limits or pause unstaking based on frequency or volume of requests, slashing penalties, or for other reasons deemed appropriate.

5.5. Service Modifications

We reserve the right to modify, suspend, or discontinue any part of the Services at any time without notice or liability.

6. Non-Security Classification of $SWELL Governance Token

6.1. Nature of $SWELL Token

The $SWELL token is a governance token designed to facilitate participation in the decentralized governance of Swell. It is not:

  • A security, financial instrument, or regulated investment product.
  • Intended to be used or held as an investment vehicle.

6.2. Legal Notice

The $SWELL token is designed to avoid classification as a security under the Howey Test.

  • The Company does not offer securities-related services or solicit investments.
  • Users are responsible for ensuring that their acquisition and use of $SWELL tokens comply with all applicable laws and regulations in their jurisdiction.

6.3. Further Clarification Regarding the Non-Security Status of $SWELL Token

$SWELL Token Use and Governance Rights

The $SWELL token is strictly intended to be used as a governance token within the Swell decentralized protocol. The token provides holders with the ability to participate in decision-making processes related to the future development of the Swell ecosystem. The $SWELL token:

  • Does Not Confer Ownership Rights: Ownership of $SWELL tokens does not represent any form of equity, debt, or ownership in Swell, Overflow Foundation, or any affiliated entity. It does not grant token holders any rights to profits, dividends, or other financial interests in the Company or the Services.
  • No Expectation of Profit: $SWELL tokens are not designed or intended to generate any financial returns or profits for holders based on the efforts of others. Any increase in the value of the $SWELL token is incidental to its use as a governance tool and not the result of any centralized efforts by Swell or its affiliates.
  • Participation in Governance Only: The $SWELL token’s sole function is to enable holders to participate in decentralized governance, such as voting on protocol upgrades, development decisions, and other community-driven initiatives. There is no expectation that $SWELL tokens will provide holders with any financial return based on the performance or development of the protocol.
  • Secondary Market Transactions: To the extent that $SWELL tokens are traded on secondary markets, Swell does not control, promote, or facilitate such transactions. Users who choose to trade $SWELL tokens do so at their own risk and responsibility. Swell does not encourage or facilitate the use of $SWELL tokens as a speculative investment.

7. User Obligations and Compliance

By using the Services, you agree to comply with all applicable local, national, and international laws and regulations, including but not limited to:

  • Anti-Money Laundering (AML) regulations.
  • Counter-Terrorism Financing (CTF) laws.
  • Know Your Customer (KYC) requirements (where applicable).

7.1. Prohibited Activities

You agree not to:

  • Use the Services for any illegal purposes, including but not limited to money laundering, terrorist financing, or other financial crimes.
  • Circumvent any restrictions or prohibitions provided for in these Terms.
  • Interfere with or disrupt the integrity or performance of the Services.
  • Use any automated means to access the Services or extract data.
  • Impersonate or misrepresent your affiliation with any person or entity.
  • Engage in any activity that could harm the Services or users.

7.2. Compliance

Failure to comply with these obligations may result in:

  • Suspension or termination of your access to Swell.
  • Legal consequences.

7.3. Reinforced Compliance with AML/KYC Regulations

Enhanced Due Diligence Procedures

In order to comply with Anti-Money Laundering (AML), Counter-Terrorism Financing (CTF), and Know Your Customer (KYC) regulations, Swell applies enhanced due diligence procedures. All users must undergo a stringent KYC verification process before accessing or using key functionalities of the Services, such as staking and governance participation.

Swell reserves the right to:

  • Request Additional Documentation: At any time, Swell may request further documentation or verification from users to confirm their identity and residency.
  • Refuse Service: Refuse to provide Services to any user who does not meet Swell’s compliance standards or fails to provide satisfactory verification.
  • Report Suspicious Activity: Report any suspicious activity to relevant regulatory authorities in accordance with applicable laws and regulations.

Users agree to comply with all AML, CTF, and KYC requirements and acknowledge that failure to do so may result in account suspension, termination, or legal action.

8. Risk Disclosures

By using the Services, you acknowledge and accept the following risks:

8.1. Blockchain Risks

  • Slashing and Penalties: Validators may be penalized or slashed by the network, resulting in loss of staked assets.
  • Smart Contract Failures: Smart contracts may contain vulnerabilities, bugs, or errors.
  • Network Disruptions: Blockchain networks are subject to congestion, downtime, or changes in protocol rules.
  • No Control Over Protocols: Swell does not control the underlying blockchain protocols.

8.2. Market Risks

  • Digital assets are highly volatile.
  • The value of your staked assets, rewards, or tokens may fluctuate significantly.

8.3. Regulatory Risks

  • Regulatory environments are continuously evolving.
  • Future regulatory actions may impact your use of the Services.

8.4. Technology Risks

  • Use of the Services involves technology risks, including internet connectivity issues, hardware or software malfunctions, and cybersecurity threats.
  • Reliance on Experimental Technology: Transactions rely on smart contracts and other nascent technologies.

8.5. No Financial Advice

  • Swell does not provide financial, investment, or legal advice.
  • Users are solely responsible for evaluating the merits and risks associated with the use of the Services.

8.6. Internet Transmission Risks

  • There are risks associated with utilizing an internet-based protocol, including hardware, software, and internet connection failures.

8.7. Regulatory Changes and SEC Compliance Monitoring

Monitoring and Compliance with Regulatory Changes

Swell operates in a highly dynamic regulatory environment, and the regulatory treatment of digital assets, staking, and governance tokens may evolve over time. To ensure ongoing compliance:

  • Ongoing Legal Review: Swell regularly reviews its operations and token offerings to ensure compliance with relevant regulatory requirements, including U.S. Securities and Exchange Commission (SEC) rules, Commodity Futures Trading Commission (CFTC) regulations, and other applicable laws.
  • Adjustment to Services: In the event of regulatory changes, Swell reserves the right to modify, suspend, or discontinue certain aspects of the Services to ensure compliance with new laws or regulations.
  • Notice of Regulatory Action: Should Swell become subject to regulatory action by the SEC or any other governmental authority, we will notify affected users and take appropriate steps to rectify the situation, which may include restricting certain features or functionalities for users in certain jurisdictions.

9. Platform Fees

9.1. Fee Structure

Swell may charge fees for certain services, including:

  • Staking Fees: A percentage fee applied to staking rewards.
  • Platform Commission: Charged in connection with the use of the Platform for the provision of Staking Services.
  • Transaction Fees: Fees for facilitating transfers of assets.
  • Withdrawal Fees: Fees for unstaking or withdrawing assets.

9.2. Fee Changes

All fees are subject to change based on network or operational requirements.

  • Note: Gas fees or transaction fees are charged on the deposit, withdrawal, conversion, swaps, or other transactions relating to the Digital Assets carried out via the Services. These fees often fluctuate based on a number of factors, all of which are not under our control, and may therefore change at any time without notice.
  • Changes to fees will be communicated in advance through updates to these Terms or via notification on the website.

10. Intellectual Property Rights

10.1. Ownership

All content, features, and functionality of the Services, including but not limited to information, software, text, displays, images, video, audio, design, selection, and arrangement thereof, are owned by Swell, its licensors, or other providers and are protected by international copyright, trademark, patent, trade secret, and other intellectual property or proprietary rights laws.

10.2. License to Use

You are granted a limited, non-exclusive, and revocable license to access and use the Services for your personal, non-commercial use, provided you comply with these Terms.

10.3. Prohibited Use of IP

Without prior written consent, you may not:

  • Modify, copy, reproduce, retransmit, distribute, sell, publish, broadcast, create derivative works from, or store the Platform’s source code or similar proprietary or confidential data.
  • Use any trademarks, logos, or content associated with Swell for commercial purposes.
  • Reverse engineer or attempt to extract the source code.

10.4. Trademarks

The Swell name, logo, and all related names, logos, product and service names, designs, and slogans are trademarks of Swell or its affiliates or licensors. Unauthorized use of the Swell Marks is strictly prohibited.

11. Limitation of Liability

To the fullest extent permitted by applicable law, Swell and its affiliates shall not be liable for any:

  • Direct, indirect, incidental, special, consequential, or punitive damages.
  • Loss of profits, data, or other intangible losses resulting from your access to or use of the Services.

This limitation applies to any damages arising from:

  • Your use or inability to use the Services.
  • Unauthorized access or alteration of your transmissions or data.
  • Any content or services obtained through the Platform.
  • Any other matter related to the Platform.

Maximum Liability: In no event will the aggregate liability of Swell exceed:

  • (A) Any Platform Commission paid by you to the Company in the preceding three months of such claim; or
  • (B) Where no Platform Commission was paid during that period, the sum of USD 100.

12. Indemnification

You agree to indemnify, defend, and hold harmless Swell, its affiliates, and their respective directors, officers, employees, and agents from and against all claims, liabilities, damages, losses, costs, expenses, or fees arising out of or related to:

  • Your use or misuse of the Services.
  • Your violation of these Terms or any applicable law or regulation.
  • Your violation of any rights of a third party.

13. Service Modifications and Termination

13.1. Modifications

Swell reserves the right to modify, suspend, or discontinue any part of the Services at any time without prior notice or liability for reasons including but not limited to:

  • Scheduled maintenance.
  • Updates to improve platform functionality.
  • Unforeseen technical or security issues.

13.2. Maintenance and Downtime

The Services may be periodically unavailable during scheduled maintenance or unscheduled downtime.

  • Swell is not liable for any inconvenience or damage due to such stoppages.

13.3. Termination

We may terminate or suspend your access to the Platform immediately, without prior notice or liability, if you breach these Terms or engage in unlawful activities.

  • Upon termination:some text
    • Your right to use the Services will cease immediately.
    • Provisions that should survive termination will remain in effect (e.g., intellectual property rights, indemnification, limitation of liability).

14. Governing Law and Dispute Resolution

14.1. Governing Law

These Terms shall be governed by and construed in accordance with the laws of the Cayman Islands, without regard to its conflict of law principles.

14.2. Arbitration

Any dispute arising out of or relating to these Terms or the Services will be resolved by binding arbitration under the rules of the Cayman Islands Arbitration Centre.

  • The arbitration will be conducted by a single arbitrator.
  • The proceedings will take place in the Cayman Islands, and the language will be English.
  • Each party shall bear its own costs, except that the fees and expenses of the arbitrator shall be divided equally.

14.3. Class Action Waiver

You agree that any dispute resolution proceedings will be conducted individually and not in a class, consolidated, or representative action. The arbitrator shall construe the agreement to arbitrate and the agreement to waive class or collective actions in any manner that will render them enforceable and give them effect. If, for any reason, this class or collective action waiver is deemed unenforceable by an arbitrator, you agree that the parties’ contract to arbitrate is then entirely void.

If any portion of these Terms other than the class action waiver is found illegal or unenforceable, such portion shall be severed and the remainder of these Terms shall be given full force and effect. Any Dispute subject to any such portion of these Terms shall be decided by the arbitrator.

14.4. Notice of Dispute

You must notify Swell in writing of any dispute within 30 days of the date it arises.

  • Notice to Swell shall be sent by email to info@overflowfoundation.io.

15. Severability

If any provision of these Terms is found to be invalid or unenforceable by a court of competent jurisdiction:

  • The remaining provisions shall continue in full force and effect.
  • The invalid provision will be replaced by a valid provision that most closely reflects the original intent.

16. Waiver

No waiver of any provision of these Terms shall be deemed a further or continuing waiver of such provision or any other provision. The failure to assert any right under these Terms shall not constitute a waiver of such right.

TO THE MAXIMUM EXTENT PERMITTED BY LAW, YOU AGREE THAT YOU WILL NOT BE PERMITTED TO OBTAIN AN INJUNCTION OR OTHER EQUITABLE RELIEF OF ANY KIND, SUCH AS ANY COURT OR OTHER ACTION THAT MAY INTERFERE WITH OR PREVENT THE DEVELOPMENT OR EXPLOITATION OF THE SERVICES, OR ANY OTHER WEBSITE, APPLICATION, CONTENT, SUBMISSION, PRODUCT, SERVICE, OR INTELLECTUAL PROPERTY OWNED, LICENSED, USED OR CONTROLLED BY ANY SWELL LABS INDEMNIFIED PARTY.

17. Force Majeure

Neither party shall be liable for any failure or delay in performance under these Terms due to circumstances beyond their reasonable control, including but not limited to:

  • Acts of God.
  • War, riots, or civil unrest.
  • Government actions or regulations.
  • Natural disasters, pandemics, or epidemics.
  • Interruptions to internet or blockchain network services.

18. Notices

Any legal notices or other communications provided by Swell to you under these Terms will be:

  • Sent to the email address associated with your account.
  • Displayed on the website.

For all notices made by email, the date of receipt is considered to be the date of transmission.

19. Amendments to these Terms

Swell may create updated versions of these Terms (each a “New Terms”) as its business and the law evolves.

  • These Terms will terminate immediately upon the introduction of a New Terms. New Terms will not be applied retroactively and cannot alter the process for resolving a Dispute between us once you have notified the Company of a Dispute.
  • If you do not wish to be bound by a New Terms, you must immediately cease using the Services. Your continued use of the Services made available thereon after the Company has published any New Terms constitutes acceptance by you of the New Terms.

20. Entire Agreement

These Terms, along with the Privacy Policy and any other agreements or notices provided to you by Swell, constitute the entire agreement between you and Swell regarding your use of the Services and supersede all prior agreements and understandings.

21. Assignment

  • Swell may transfer or assign its rights and obligations under these Terms without notifying you or obtaining your consent.
  • You may not transfer or assign your rights and obligations under these Terms.

22. Relationship of the Parties

Nothing in these Terms shall be deemed to constitute, create, imply, give effect to, or otherwise recognize a partnership, employment, joint venture, or formal business entity of any kind. Except for the indemnity and exculpation provisions herein, these Terms are intended to be and are for the exclusive benefit of you and Swell.

23. Third-Party Services and Content

23.1. Third-Party Service Providers

  • Swell may use third parties to gather, review, and transmit your data.
  • By using the Services, you grant third-party providers the right to access and transmit your data in accordance with their terms and policies.

23.2. Third-Party Websites

  • The Services may contain links to third-party websites.
  • Swell has no control over and is not responsible for the content or practices of these websites.

23.3. Third-Party Information Accuracy

  • Information provided by third parties is not guaranteed to be accurate, complete, or current.
  • Swell is not responsible for any errors or omissions in such information.

24. Cookies and Tracking Technologies

When you access the Services, we may use cookies and other tracking technologies to:

  • Recognize you as a user.
  • Customize our services and content.
  • Collect information about your computer or other access devices.

If you block or delete cookies, we may not be able to provide you with all of the services.

25. Privacy and Data Protection

Our Privacy Policy, available on our website, describes how we handle the information you provide to us when you use our Services. By using the Services, you consent to the collection and use of this information as set forth in the Privacy Policy.

26. Contact Information

If you have any questions about these Terms or wish to contact us for any reason, please reach out to:

Overflow Foundation
3119, 9 Forum Lane
Camana Bay, George Town
Grand Cayman KY1-9006
Cayman Islands
Email: info@overflowfoundation.io

By using the Swell website and Services, you acknowledge that you have read these Terms of Service, understand them, and agree to be bound by them.

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