Stargate Integration Proposal: Swell L2 ETH Pool Deployment

Summary

This proposal outlines a request for the Stargate DAO to approve and enact a deployment of the Stargate dapp with an ETH pool on Swell L2. The deployment aims to achieve a 5% yield on $5 million worth of ETH liquidity and will be supported by Swell’s native incentive programs.

Motivation

Network Overview

Swell L2 is the Restaking Yield Layer, powered by Proof of Restake, built on the OP Stack and part of the Optimism Superchain ecosystem. As a member of the Superchain, Swell L2 benefits from:

• Proven scalability and security of the OP Stack architecture
• Shared security model with other Superchain members
• Standardized bridge infrastructure
• Network effects of the growing OP ecosystem
• Seamless interoperability with other OP Stack chains

Key advantages of Swell L2 include:

• Low TX Fees through the OP Stack
• Native yield generation through liquid staking
• Full EVM compatibility
• Unified security through the OP Stack

Strategic Benefits

Stargate Benefits

TVL:

Swell L2 has been the 2 second fastest growing L2, beating Blast to 1 billion on pre-deposits

Swell Chain on Defillama

and continues to be one of the biggest pre-deposit campaigns of this year

Bridge Volumes:

Due to Swells popularity, we expect stargates integration into Swell L2 to bring substantial volume to Stargates Bridge. This is due to the amount of TVL we expect and the dominance of OFTs in the assets being prioritized on the L2.

Shared Liquidity: Integration with Stargate will connect Swell L2 to Stargate’s extensive network of connected chains, enhancing cross-chain liquidity and further strengthening the Superchain ecosystem.

Cross-Chain Efficiency: Swell L2 users will gain access to secure, cost-effective cross-chain transactions through Stargate’s established infrastructure leveraging the LZ messaging protocol

DeFi Ecosystem Growth: The integration will catalyze Swell’s DeFi ecosystem by attracting liquidity providers and encouraging new protocols to build on top of Stargate, while leveraging the network effects of the Superchain.

Proposal

Deploy Stargate on Swell L2 with an initial ETH pool targeting $5 million in liquidity. The Layerzero endpoint will be available on Swell L2 from day one of deployment, providing seamless integration with both the Superchain and the broader blockchain ecosystem.

Swell further proposes that Stargate DAO redirect 5 million in ETH to help seed the pool initially from Stargate V1 pools

Incentive Structure

Swell Rewards Program

• Stargate DAO will receive incentives to target 5% on $5m

Conclusion

Swell L2 is the restaking yield layer, powered by proof of restake. This proposal presents a comprehensive integration plan that leverages Swell L2’s infrastructure as part of the OP Stack ecosystem while offering attractive yields to liquidity providers. The combination of Swell’s native incentives, Stargate’s established cross-chain capabilities, and the security and scalability of the Superchain will create a powerful solution for ETH bridging and liquidity provision.

The targeted 5% yield on $5 million of ETH liquidity demonstrates a strong commitment to attracting and maintaining liquidity in the Stargate ecosystem while providing meaningful returns to the Stargate DAO. As a member of the Superchain, Swell L2 offers the additional benefits of a proven, standardized architecture and a growing ecosystem of interconnected L2 solutions.

All DAO members are encouraged to participate in this decision-making process to ensure the deployment aligns with both Stargate’s vision and the broader community’s interests.