Uniswap v2 Pools Surge on L2s, Overtaking Ethereum

Uniswap-UNI-dynamic-logo-pink-and-blue

  • Uniswap now has more v2 liquidity pools on Layer 2s than it does on Ethereum, with Base leading the pack as L2s continue to gather steam.
  • Uniswap continues to fight the SEC on the regulatory front amid a delayed governance vote on incentives that has exposed some cracks in its decentralized ecosystem.

Layer 2s on Ethereum have continued to gather steam as users seek alternatives to the mainnet’s hefty fees. The latest demonstration of this increasing influence is on Uniswap, where v2 liquidity pools on L2s have now overtaken the mainnet.

Launched in May 2020, Uniswap v2 is the decentralized exchange’s first upgrade and second iteration. It introduced new price oracles, flash swaps, ERC20 tokens and more. The exchange has since released v3 and is set to launch v4 later this year, as Crypto News Flash reported.

Uniswap shared on Thursday data that shows users are now deploying more liquidity pools on v2 on Layer 2s than on the Ethereum mainnet.

While Arbitrum, Polygon and Optimism were mentioned, it’s Base that has dominated the L2s on Uniswap’s v2 pools, accounting for over 95% of all L2 activity.

Uniswap expanded v2 into L2s in February this year after being on the Ethereum mainnet for over four years. It launched on Optimism, Arbitrum, Polygon, BNB Chain, Avalanche and Base.

At press time, UNI trades at $10.53, losing 1.66% in the past day as volume dipped by 47%.

Base is a Layer 2 built on Ethereum and developed by a Coinbase team led by Jesse Pollak. It claims to have over 350 dApps on its network, with gaming and social finance being the most common. According to Franklin Templeton, over half of all crypto social finance activity (which is a combination of social media with financial features) is on Base. However, DeFi apps, while fewer than social finance and gaming apps, draw the most volume, with Uniswap and Jumper being the leaders in the ecosystem.

Base has proven to be a stroke of genius for Coinbase. The American exchange has traditionally relied on transaction fees for most of its revenue. This model faces great strain during the bear market, making it critical to diversify. Base is the exchange’s best avenue for diversification; in Q1 this year, the network brought in over $56 million in revenue for the exchange.

Layer 2s Chip Away at Ethereum’s Dominance

Uniswap v2 pools are just the latest demonstration of a long-term trend—Layer 2s are chipping away at Ethereum’s market.

As Crypto News Flash reported this week, a report by Bitwise found that L2s are contributing more transactions than the mainnet on Ethereum. In Q1 this year, the ecosystem collectively saw 2.25 million average daily users, up from 250,000 four years ago. This incredible growth has been down to the explosion of L2s, with Base, Arbitrum, Optimism and Polygon among those making the biggest mark.

Data by L2Beat show that Layer 2s are making millions, with Base leading the pack at $6.1 million in May. Blast and Optimism followed suit, each making around $1.5 million.

Data from Dune showed Base making even more at $7 million.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

Latest posts

post-thumbnail
Top 3 Altcoins to Stack In This Crypto Market Crash!
The post Top 3 Altcoins to Stack In This Crypto Market Crash! appeared first on Coinpedia Fintech Ne...
READ MORE
post-thumbnail
Notcoin and BounceBit Flash in Green Amid Market Turmoil, DTX Exchange Steals Spotlight With a Staggering $700,000 Presale
The post Notcoin and BounceBit Flash in Green Amid Market Turmoil, DTX Exchange Steals Spotlight Wit...
READ MORE
post-thumbnail
Crypto Market Crash: Top Altcoins To Buy This Dip
The post Crypto Market Crash: Top Altcoins To Buy This Dip appeared first on Coinpedia Fintech News ...
READ MORE
post-thumbnail
US Elections 2024: Pro-Crypto Candidates for the WIN? Ripple CEO Comments
The post US Elections 2024: Pro-Crypto Candidates for the WIN? Ripple CEO Comments appeared first on...
READ MORE
post-thumbnail
Is Shiba Inu Dead? SHIB Continues to Slump as Traders Switch to New Meme Coin
The post Is Shiba Inu Dead? SHIB Continues to Slump as Traders Switch to New Meme Coin appeared firs...
READ MORE
post-thumbnail
Remilia DAO Hack: $4.3 Million in Stolen ETH Traced to Tornado Cash
The post Remilia DAO Hack: $4.3 Million in Stolen ETH Traced to Tornado Cash appeared first on Coinp...
READ MORE
post-thumbnail
XRP Price: $1000 Target Seems Far Fetched Amid Predictions of Drastic Fall to $0.20 Levels
The post XRP Price: $1000 Target Seems Far Fetched Amid Predictions of Drastic Fall to $0.20 Levels ...
READ MORE
default post thumbnail
Insider Buys $1.56M in $DJT Tokens Ahead of Trump Launch News
The post Insider Buys $1.56M in $DJT Tokens Ahead of Trump Launch News appeared first on Coinpedia F...
READ MORE
default post thumbnail
Potential Downtrend In Play? TON Struggles As Price Falls Below $7.7
TON has experienced a dramatic price shift, falling below $7.7 three days after reaching an all-tim...
READ MORE
default post thumbnail
From Cheers To Tears: Beercoin (BEER) Dries Up, Loses 70% Of Its Value
Beercoin, the effervescent Solana-based meme coin that promised a taste of financial freedom, is exp...
READ MORE
Read more posts