Leading DeFi Protocols Are Rushing To Implement Layer 2 Solution

The leading DeFi protocols are rushing to implement the Layer 2 solution which would ease the burden of high fees, the latest blockchain news show. As we can see, Ethereum is kind of left behind while the decentralized finance (DeFi) protocols are racing to implement the scaling.

Ethereum’s gas fees skyrocket and the network struggles under the demand – but on the other hand, popular DeFi platforms such as Uniswap, Aave, and Synthetix are getting closer to rolling out the scaling solutions.

Synthetix is a great example. The on-chain synthetic assets protocol is one of the leading DeFi protocols that are aiming at Layer 2. As we can see, the protocol tracking the value of real-world assets is upgrading on September 24 to a primitive version of Layer 2 scaling.

A blog post by the founder Kain Warwick known as the ‘Fomalhaut’ upgrade is the first phase of L2 migration to Optimistic Ethereum. It is also an incentivized testnet that aims at alleviating the gas costs for small SNX stakers who have faced fees in the hundreds of dollars, collecting weekly rewards.

A second upgrade which is called ‘Deneb’ is also due on September 29, including measures to reduce gas fees. Warwick spoke and addressed the ETH news, adding:

“Both of these releases are direct responses to increased gas costs due to Ethereum congestion. Some of the changes are stop-gaps while we transition to Optimistic Ethereum but included in these two releases is the first step towards L2 Synthetix.”

The hybrid approach shows that as leading DeFi protocols are rushing to implement Layer 2 (L2), it will likely take Synthetix to do so through to the end of the year. Optimistic rollups is a Layer 2 solution that scales ETH smart contracts and dApps up to 2000 transactions per second.

On the other hand, we can also see the leading DeFi DEX in the world, Uniswap, working on a major upgrade with Uniswap V3. When asked about it, the founder of Uniswap Hayden Adams said that V3 would “fix everything” implying that the Layer 2 might be a big part of the upgrade.

What improvements will v3 have?

— 千㠪㇄👨‍🌾✪ (@rafdo) July 25, 2020

There is already a basic demo version of the Layer 2 of the token swap which is live at unipig.exchange, launched in October 2019 in collaboration with Optimistic rollups.