In our latest Space, we were joined by builders from Polygon, AltLayer, and Ankr to discuss the development of Swell L2.
In case you missed it, here are the top questions from the event.
What is Swell L2 and why are we building it?
"On a technical level, Swell L2 is a ZK-validium built on the Polygon CDK.
Conceptually, the L2 is rooted in restaking, which has been a big narrative as of late, and a major focus of this year with the launch of restaking protocols such as EigenLayer and Symbiotic.
With the launch of EigenLayer, we saw a tonne of adoption through swETH being deposited on their platform, and in turn launched rswETH, Swell’s own natively restaked LRT.
One of the problems we saw was that there was all of this TVL going into these protocols, with no use cases being built around it. We realized that with all of this security we have backing our LRT, we can use AVS’s as infrastructure to decentralize and scale an L2 in a way that is modular, meaning each component of the L2 is ideally delegated to a specialized provider who is the best provider in that space.
This will be secured by the three Swell tokens – SWELL, swBTC, and rswETH.
By doing this, the L2 is able to drive value towards these tokens which enhances Swell’s liquid staking and restaking offerings, while also providing what we feel will be the next generation of DeFi on L2’s."
— Abi, Swell
What has happened since the L2 pre-deposits launched?
"Swell launched L2 pre-deposits in April this year. This pre-launch has been one of Swell’s most successful campaigns, and is a testament to the community’s belief in what we are building. It has also been a great indicator of the communities willingness to want a differentiated L2 since there are a lot of L2’s launching at the moment that don't actually need to be L2s.
For Swell, we found it was important to launch the pre-deposit campaign and really think about the story behind the L2, including what we are setting out to achieve, and how we will differentiate ourselves in the market."
— Abi, Swell
Why did Swell choose to build on Polygon CDK?
"We chose the Polygon CDK for many reasons, one being that we have a huge belief in the Polygon team and what they’re building.
One of the reasons we chose to use a ZK rollup opposed to an Optimistic rollup is because ZK rollups use ZK proofs to allow for much quicker withdrawal times from the L2 back to mainnet, so the value leakage from the L2 is essentially gone.
There are two main forms of ZK rollups. One that uses Ethereum for data availability (DA), and the other which is a validum, which uses EigenDA for data availability.
Swell will be using the latter, as ZK validums greatly reduce the transaction costs on the network with EigenDA, making it much cheaper than Ethereum. One of the benefits of this is that it can be extended on. We are working with partners like Aligned to also make the proving of the ZK proofs on mainnet much cheaper as well.
This is the beauty of Swell L2. We can take the benefits of a ZK rollup which is ultimately a better stack, and we can solve the issues that potentially impact it using AVS’s."
— Abi, Swell
"For people who don't know, CDK stands for Chain Development Kit. This came from the idea that if we really want to get to a good solution for any of this, we really need to lean into ZK. By bringing the costs of proving down, we make it a lot easier to create not just a single network, but a network that talks to each other in a more secure way.
This is really going to benefit Swell specifically because this architecture is very modular. It allows people to choose different tools to build a blockchain, and they can also build tools that application builders and users can use to interact with the blockchain, and that is what we’re trying to build here with the AggLayer."
— Paul, Polygon
How does the AggLayer benefit DeFi, and in particular Swell?
"The idea of the AggLayer is two-fold. One of the things we really want to do is be able to have a consistent way to settle the network of ZK chains, or arrive at what their final state is.
When we built the Polygon zkEVM, we designed a method for doing this that had a really awesome property, which is that because finality is deterministic and can be verifiable on L1, you can also build a bridge around that which means that not only do you have finality of the chain but you have finality of the bridge. Via some clever arrangement you can think of that as a way to build cross chain interactions.
From my perspective, the AggLayer is a combination of a baseline settlement protocol and a bridge, and on top of this bridge we can layer tools for things like fast interoperability i.e. how do I move an asset or a message between two chains at the same speed of those chains finality.
When you think of Swell, the idea here is that we are trying to make assets that come from one of many networks productive across a whole set of networks. That asset productivity requires a certain level of composability that you don't get unless you start thinking of architecting applications differently.
If you listen to what both Abi and I are saying, it's that we can start to think of blockspace design as application design. The way that we were building DeFi applications for Ethereum in 2019 are now being able to be done at the blockchain level, meaning blockchains become robust applications and it opens up the design space for what it means to be building in Web3."
— Paul, Polygon
"The real vision for Swell is that Swell assets including swBTC, rswETH and the SWELL token, are able to leverage and share this same architecture that we are working with now to other chains. This positions Swell assets as the assets that are ultimately securing the decentralization and scaling of, one day, all the Polygon CDK chains.
By doing this through the AggLayer, we can really stay true to the vision that liquidity really is aggregated. While the L2 is awesome, what’s even more clear is how the entire system fits together and how every product compliments each other.
We really see Swell as the first vertically integrated full stack solution, and once we get this system running you won't be relying on a single sequencer. All of the value that the chain is able to create by offering this superior blockspace is not driven back to some foundation or DAO, it is fundamentally driven back to the actual users that are holding the assets that are securing the stack."
— Abi, Swell
What is the restaked rollup model, and how will it support Swell L2?
"At AltLayer we are working on allowing users to have unlimited blockspace by deploying their own dedicated rollup. One of the most important things that Paul from Polygon mentioned is that there are too many rollups in the space, and having a rollup in general does not differentiate you, it's the applications on top of the rollup that brings value to the chain.
At the moment, TVL is not the most important indicator within the rollup space, it's more about active users and if the rollup itself can generate sequencing revenue and enough transactions to cover the cost of the rollup to be sustainable.
At AltLayer we are working on a number of products.
We are developing Rollups-as-a-Service (RaaS) and have been spinning up close to 40 rollups within the space. We realized that people are finding new ways to redesign their rollup architecture in terms of technical standpoint, as well as looking for new ways to engage with their community, for example using shared security with EigenLayer.
We have also developed a framework which is called Restaked Rollup, that involves a set of vertically integrated AVS’s on top of EigenLayer. All of these AVS’s are created on demand so you can decide whether you do or do not want these functionalities or services that aim or are purposed to enhance the functionality of a rollup in general.
The first function we have designed which is live on the market is called MACH – a fast finality layer that allows you to have finality within a few seconds, compared to Ethereum which is ~30 minutes. AVS operators run MACH software, and it validates the state transition of the rollup in real time. When it has finished validating, it will proceed to finalize the block and you will be able to proceed with your transaction.
With MACH you are able to enjoy the shared security from EigenLayer, as well as the EigenLayer permissionless token support where you can bring additional tokens and different ERC-20 tokens as your security guarantee beyond the MACH AVS.
The second AVS we are building is called VITAL. You can treat it similarly to a firewall or VPN system with economical backing from EigenLayer. It acts similar to MACH but the difference is that it prevents users from continuing to use the chain while an invalid state transition has been detected.
The last product we are building is called SQUAD which aims to decentralize all of the sequencers with AVS node operators. This means that in the future there won't be one provider that is running the entire architecture of the rollup, instead it could be a bunch of AVS operators with different entities with economical backing, as well as slashing conditions behind it.
In the future our goal is to be able to have better security guarantee, better finality of time for high frequency trading apps, and better decentralization with decentralized sequencing."
— Wen, AltLayer
What is the Ankr RPC, and how will it make a difference to Swell L2?
"Ankr’s infrastructure network has a presence in over 20 countries, and all of the nodes we run on the blockchain are globally distributed. We have our own custom built cloud native supports and are experienced running a vast diversity of different blockchains across L1s and L2s with different clients. We also have monitoring and alerting in place to make sure we can dynamically scale in response to any spikes in RPC traffic in specific regions.
The benefit for the user is that they are guaranteed to receive the lowest latency and guaranteed response."
— Paul, Ankr
What can we expect as we near the launch of Swell L2?
"Swell will be launching a private beta testnet with a purpose to allow our dApp partners that we’re working with to launch some of the co-integrations before we go live. This is a way for us to test the stability of our L2 and get some of the integrations up and running to show our users what we've been working on with our partners."
— Abi, Swell
Thanks to everyone who attended the event!
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