Swell launches its own layer-2 for restaking with Polygon CDK

rswETH, Swell’s liquid restaked token, will be the gas token used on this new rollup

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Swell and Adobe Stock modified by Blockworks

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Swell, a liquid staking protocol, will launch its own layer-2 rollup solution for restaking using AltLayer and EigenDA.

Restaked rollups are a design pioneered by AltLayer. Unlike a standard rollup solution, these variants are architectured to include vertically integrated Actively Validated Services (AVS) systems. 

In restaked rollups, Actively Validated Services are deployed as modular components which help to spread validation logic and responsibilities across the network. This significantly reduces the centralization of power and risk.

Read more: Ether.fi announces $23M Series A round as restaking interest grows

These components contribute to the system’s resilience by verifying the accuracy of rollup states and achieving faster transaction finality. This introduces a structured approach to scaling, focusing on security, efficiency and the distribution of control.

Swell has noted that the project’s liquid restaked token (LRT), rswETH, will be the chain’s native gas currency. The chain’s governance token will be SWELL, which will oversee not only the new Swell layer-2 but also swETH and rswETH. 

Blockworks research analyst Brick notes that launching a rollup will enable Swell to expand vertically across the value chain, offering native integration for the project’s LRT.

“Newer rollups often struggle with bootstrapping capital. In contrast, Swell’s ~$1.1 billion TVL positions the project better than most to kickstart activity on its new layer-2,” he said.

He adds that it is unlikely that Swell will be the only LRT provider to launch a rollup, noting that many of these solutions will likely utilize similar plug-and-play solutions, converging from a design perspective.

This sentiment is shared by Blockworks research analyst Ren Yu Kong, who notes that Swell’s move is similar to that of Blast earlier last year.

Read more: Blast from the past: 3 years on from the launch of ETH staking

“Just like how Blast kickstarted the idea of a layer-2 with yield bearing assets from native staking on ETH, it was only a matter of time before a project would choose to do the same with restaking given the extra yield available,” Kong said.

He acknowledged that building a restaked rollup will enable Swell to launch more products that are feature specific. 

“Building a restaked rollup allows the rollup to launch more ‘feature-rich’, with Swell planning services [like] decentralized sequencing and faster finality, which we expect more rollups, whether restaked or not, to include over the long term,” Kong said.

Updated March 14, 2024 at 9:43 am ET: Clarified use of rswETH and swETH.


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