Uniswap Ethereum Layer 2 Addresses Surge to Record 8.5 Million

The number of Ethereum layer-2 wallet addresses engaging with Uniswap’s decentralized exchange surged significantly last month compared to the figures from June, as indicated by data from Dune Analytics. In June, a record-breaking 8.5 million Ethereum (ETH) addresses participated in trading on Uniswap through layer-2 solutions such as Arbitrum, Base, Optimism, Polygon, and ZKSync. Uniswap stands as the largest decentralized exchange (DEX) across all blockchain platforms, having accrued close to $100 million in fees during June alone.

Layer-2 solutions operate either on top of or alongside Ethereum’s mainnet, serving to enhance the functionality of the second-largest decentralized network in the crypto sphere. While Ethereum, co-founded by Vitalik Buterin, is renowned for its secure and permissionless transactions, congestion on the main chain can lead to increased transaction costs.

The primary purpose of layer-2 solutions is to alleviate congestion on Ethereum’s main chain and provide a more cost-effective route for engaging in transactions within the prominent decentralized finance ecosystem.

Protocols like Base and Polygon had already established themselves as offering lower transaction costs, commonly referred to as gas fees, in comparison to Ethereum. The introduction of the March Dencun upgrade further optimized this cost-saving feature. According to L2Fees data, sending Ether via layer-2 networks costs less than $1, while swapping digital assets incurs a fee of under $3. This enhanced affordability likely contributed significantly to the uptick in layer-2 addresses since February, just prior to the rollout of the Dencun upgrade.

Despite the positive trend in the rise of layer-2 addresses, there has been a decline in total user deposits, known as total value locked (TVL), across various decentralized finance chains, including Ethereum and its layer-2 solutions. DefiLlama data reveals that over the past month, there have been notable reductions of up to 25% in TVL figures. The diminishing TVLs mirror market adjustments and a broader downturn in the altcoin sectors.

The recent developments in the Ethereum ecosystem, particularly the growth in layer-2 adoption and the evolving landscape of decentralized finance, underscore the ongoing efforts to enhance scalability, reduce costs, and optimize the user experience within the crypto space.