Capital efficient swaps to/from ethereum L2s

[adambor]

So far the status quo was to have liquidity pools separately on every ethereum L2 we deploy on, this fragments the liquidity with every new added chain and requires dynamically shifting liquidity to where it's needed.

With swap+ however we can let the liquidity live on top of ethereum L1 and then bridge to the selected L2s on-demand using canonical bridges, this will ensure the same liquidity hosted on ethereum L1 can be used to facilitate a swap to any of the ethereum's L2. The canonical bridges are generally quite fast when going L1 -> L2 (for Starknet this is 2-3 minutes, which is negligible in comparison to bitcoin block confirmation times - ~20 minutes for 2 confirmations).

Swapping from ethereum L2s can only be done natively (since canonical bridges for withdrawals are very slow), but this is anyway efficient since it again re-uses the same bitcoin liquidity on the bitcoin side. The only drawback being that once ethereum L2 assets are swapped into bitcoin, the LP will need to bring these assets back to the L1 liqudity pool (or maybe some assets can still be kept on on an L2 and preferrably used to process smaller swaps).

[adambor]

Note, this doesn't work so well anymore in high-fee ethereum environment!

[Pafika97]

This is a very elegant approach to addressing the liquidity fragmentation problem across Ethereum L2s. By anchoring liquidity on Ethereum L1 and bridging to L2s on demand via canonical bridges, the model essentially decouples liquidity provisioning from chain deployment - which is a significant step toward true composability between scaling layers.

The fact that L1-L2 bridging latency is relatively negligible (especially when compared to BTC confirmation times) makes this setup not only feasible but also operationally efficient for most real-world use cases. I also appreciate that the design acknowledges the asymmetry in withdrawal times and leverages native L2 swaps for the return path - effectively optimizing for both capital efficiency and UX.

Long term, it ll be interesting to see how LPs manage rebalancing strategies between L1 and various L2s, especially as smaller pools on L2s start to handle retail-sized swaps. This hybrid liquidity architecture could become a strong foundation for multi-chain market depth if the incentives for L1 liquidity providers are structured correctly.