Uniswap Leads Layer 2 Adoption on Ethereum

Uniswap, the decentralized DEX, establishes itself as the main application on Ethereum in terms of gas and block space usage, thanks to Layer 2 (L2) solutions that reduce costs and concentrate liquidity.

Prior to the Dencun hardfork, Uniswap users on L2 experienced significant improvements compared to the Ethereum mainnet. L2 offers at least 75% more liquidity concentration and lower gas costs, increasing trading profitability and liquidity provision. Although Ethereum accounts for only about 25% of the number of transactions, 60% of the volume comes from other chains.

Research highlights that individual users and retail liquidity providers perform better on L2, such as Arbitrum. The continued migration to L2, driven by increased security and lower costs, benefits both Ethereum and L2s, promoting the full potential of decentralized markets.

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