Lido Announces Permanent Shutdown of Swellchain on June 15
Lido officially announced that Swellchain (an Ethereum Layer 2 launched by Swell Network) will officially shut down on June 15, 2026. Users must withdraw all wstETH assets before this date.
After the shutdown, Swellchain will be permanently closed, and any remaining wstETH may be unrecoverable.
wstETH holders in the market and Lido users are accelerating withdrawals and migrating assets. Lido aims to reduce user losses through advance notice, benefiting liquid staking protocols while putting short-term pressure on low-activity L2 projects, as funds shift from marginal Layer 2 to the Ethereum mainnet and mainstream L2s.
Source: Public Information
ABAB AI Insight
Swell Network previously positioned wstETH as the core liquidity asset of Swellchain. This permanent shutdown marks the first proactive closure of a Layer 2 project within the Lido ecosystem, continuing the trend of multiple low TVL and liquidity-deficient L2 projects exiting since 2025. Lido's choice to proactively withdraw aims to protect the reputation of its core liquid staking business.
In terms of capital flow, Lido is guiding users to withdraw wstETH to the Ethereum mainnet or migrate to other integrated chains, while shrinking non-core L2 resources. The motivation is to concentrate computing power and liquidity to high-efficiency mainnets and leading Layer 2s, reducing decentralized maintenance costs and avoiding potential user disputes.
Similar to the forced closures of several small-scale L2s (such as certain GameFi chains and testnet projects) due to insufficient activity in 2024-2025, Swellchain currently signifies the Layer 2 industry's transition from rapid expansion to a phase of project elimination and resource concentration.
Structural judgment: Essentially a matter of capital concentration. The high competition and ongoing Gas/maintenance costs in the Layer 2 space make it difficult for low-activity projects to sustain. The mechanism is that users and liquidity naturally migrate towards a few chains with high TVL and strong security, forcing capital to concentrate from dispersed experimental L2s to the Ethereum mainnet and leading Layer 2s.
ABAB News · Cognitive Law
The more L2s there are, the earlier the shutdown.
The more dispersed the liquidity, the faster the project dies.
Withdraw early to minimize losses.