Ethereum layer-2 wallet addresses using Uniswap’s decentralized exchange nearly doubled last month compared to numbers recorded in June.
Dune analytics data showed 8.5 million Ethereum (ETH) addresses trading on Uniswap via L2s like Arbitrum, Base, Optimism, Polygon, and ZKSync, setting a new all-time high. Uniswap is the biggest DEX on any blockchain, generating almost $100 million in fees in June.
ETH layer-2s run atop or adjacent to Ethereum’s mainnet to help the second-largest decentralized network in crypto. Although Vitalik Buterin’s co-created blockchain is known for secure permissionless transactions, on-chain bottlenecks often arise, increasing the cost of sending assets.
L2s were designed to decongest ETH’s primary chain and offer a cheaper pathway to trading on the biggest decentralized finance ecosystem.
Over 8.5M addresses on L2s last month
That’s almost double the previous all-time high 🤯 pic.twitter.com/n7bFWFuoMv
— Uniswap Labs 🦄 (@Uniswap) August 9, 2024
You might also like: Surprising Ethereum price prediction: $18,000 on the horizon?
Ethereum L2 addresses rise, but TVL is down
Protocols like Base and Polygon already boasted cheaper transaction costs, known as gas fees, than Ethereum. However, the March Dencun upgrade improved this offer.
According to L2Fees, it costs less than $1 to send Ether on layer-2 networks and under $3 to swap digital assets. This affordability is likely a major reason L2 addresses have increased since February, just before developers shipped Dencun.
While this pattern has played out, total user deposits, called total value locked (TVL), have decreased across DeFi chains, including on Ethereum and its L2s.
Per DefiLlama data, up to 25% drops have occured in the last 30 days. Decreasing TVLs echoed market corrections and a broad downswing in altcoin sectors.
Read more: BlackRock seeks to launch options on Ethereum ETFs. What does this mean for the market?