Exploring the Technical Architecture of Swell L2 | Space Recap

We were joined by the key infrastructure collaborators of Swell L2 – AltLayer, Polygon, EigenDA – as well as Kairos Research, to talk about the vision of Swell L2 and the technical architecture behind it.

In case you missed it, here are the top questions from the event.

What is Swell L2?

"To give some background, Swell launched its LRT, rswETH, around the end of January 2024. From there we realized that we have an LRT with a lot of security behind it, so thought why not use it to secure something that extends our ecosystem. 

Swell L2 is a zk rollup built using the Polygon CDK, and is a big collaboration between AltLayer and Polygon. We will be using AltLayer’s AVS’s for decentralized sequencing, verification and fast finality, and EigenDA for data availability.

What’s unique about Swell L2 is that our LRT will be securing all of the components of the L2 — from data availability to sequencing — which creates a flywheel whereby usage of the chain will drive higher yields towards our LRT in a way that is inaccessible for other LRTs on the market.

We have been working very closely with AVS's to bring them on as key infrastructure pieces of the chain, with the likes of Drosera, Brevis and other projects able to bring a level of dApp expression and composability that hasn't been seen on other L2s — all powered by EigenLayer and secured by our LRT."  

— Abi, Swell 

What is Polygon CDK and what does it enable for Swell L2 alongside Polygon’s AggLayer?

"Polygon Chain Development Kit (CDK) is an open source framework created by Polygon Labs for deploying and running customized Layer 2 blockchains that are compatible with Ethereum, and leverage zk proof for scalability and security. Swell L2 is being built using a zk rollup that funnels transactions offchain. It is really exciting to see how all these projects — Polygon, Swell, EigenDA and AltLayer — are coming together to provide these very unique solutions that can be tailored to each project. With Polygon CDK, Swell benefits from the customizability that allows them to configure various aspects of their L2 chain i.e. execution environment, governance etc.

As for the AggLayer, it extracts away the complexities of bridging from chain to chain for the user. In doing so, you are abstracting away the poor user experience that we are aware of, and also solves the liquidity fragmentation issue that we have in the Ethereum ecosystem. 

This makes it seamless for the user to go from blockchain to blockchain or app to app, and completely abstracts away that poor user experience of bridging. You also get this shared liquidity because all of the blockchains are connected to each other through the AggLayer, which helps to bootstrap potential users and liquidity, as well as provide access to user assets that these blockchains have.

Swell is leveraging the tools that are available in Polygon’s CDK that allows for flexibility to create a highly customized, secure and interoperable Layer 2 solution. I’m excited to see how it develops, it has been very exciting to watch so far."

— Justin, Polygon Labs 

"The AggLayer was one of the key reasons why Swell chose Polygon CDK. Being an LRT protocol, while we want TVL on our chain, we are also happy for it to flow through the other arms of our protocol. We really want to position Swell L2 as being the central spoke of the AggLayer, and everyone who wants access to both staking and restaking yield will be able to go through Swell, get the LST/LRT, and take those yields. It’s a double win for us if the liquidity runs through Swell L2 as that's our asset moving across different chains."

— Abi, Swell 

How does EigenDA fit into the Swell L2 stack?

"EigenDA as a product exists to scale L2s and L3s in the Ethereum ecosystem along one particular dimension. Right now, there are roughly three scaling bottlenecks for blockchains in general – DA, Compute and Stake Growth. EigenDA focuses on the first of these by enabling rollups to put their transaction data offchain and post DA certificates to Ethereum. This essentially decouples the throughput of Ethereum which is relatively lower from the throughput of the L2. By integrating with EigenDA, Swell can expect to have throughput that can go all the way up to EigenDA’s theoretical maximum of 10MB per second."

— Teddy, EigenDA

"EigenDA has a ton of throughput and it fits really nicely into our unified security model as it ties everything back to EigenLayer. With this, we will be able to drive the most amount of value back to EigenLayer and Ethereum mainnet by using Ethereum’s validator set through EigenLayer to power all of the different AVS’s."

— Abi, Swell  

"We are on the cusp of this sort of narrative shift back to Ethereum L2s and L3s. I think rollups that are building on EigenDA, such as Swell L2, are going to have this immense scaling capacity that will surprise everyone, and surpass the current state of the art. For users it means low cost reliable transactions, and to me, that's incredibly exciting."

— Teddy, EigenDA 

What is the restaked rollup model and where does it fit in?

"Swell is in a super unique position because the relationship between the LRT and the L2 is circular, in that the LRT goes onto the L2, but the underlying ETH of that LRT goes into EigenLayer and ends up securing the same AVS’s that power the chain the LRT is now on.

We feel that the way we’ve approached it with this holistic model of one side being a security provider, and the other side creating an environment which requires this security itself, is what completes the restaked rollup in a way that's circular for us." 

— Abi, Swell 

Kairos recently published a research article on Swell L2. What are the highlights from that report and what is your take on Swell L2?

"Our main takeaway with Swell L2 is we think it's set apart from the rest because it has this healthy reflexive flywheel that you just don't see elsewhere in the L2 landscape. 

We believe that Swell L2 is the optimal place for an AVS token to find its liquidity hub in the L2 landscape. If you can aggregate enough of the AVS token liquidity on an L2, you will see natural organic use from users there, and I imagine some more sophisticated users will come in to take advantage of CEX/DEX arbitrage between the price discovery for tokens on Swell L2 and centralized exchanges. 

The whole restaked rollup idea is super compelling because the biggest issue with L2s is that the tokens are highly dilutive, and don't have real value accrual. From day 1 you will be able to stake SWELL tokens, so you’re going to be able to receive the sequencer fees right back. Swell L2 also has all the incentives to keep users around which other L2s are struggling with. We think there's a lot of reasons to be bullish here." 

— Ian, Kairos Research 

Thanks to everyone who attended the event!

‍ Listen to the recording. ‍

To stay up-to-date with Swell, join our thriving community on Discord , Farcaster , DeBank , and X . 

‍