22 Nov 2021 Josphat Kariuki
Ethereum Layer-Two TVL Explodes To A New All-Time High
Ethereum has always suffered from network congestion, which ups the transaction fees. With the recent wave of adoption, the problem for the second-largest crypto to date becomes more evident. Transaction costs on Ethereum have increased by 700% over the past four months, peaking at $65 per transaction on November 9. Currently, fees have settled around $40.
Transaction costs can greatly vary too since a simple operation like Ethereum transfer can cost around $40, while a more complex smart contract can cost around $140.
And while Ethereum sees both adoption and gas fees increases, another layer-2 solution is preparing to enter the world of yet another decentralized finance platform. It turns out Polygon (ex-MATIC) proposed its network to be integrated with the Uniswap decentralized exchange protocol. Polygon has already been deployed on other DEX platforms, such as SushiSwap and AAVE.
Тhe proposal comes from Polygon’s development team and is currently up for discussion on Uniswap’s Governance Forum, and the community would decide whether or not to deploy Uniswap on Polygon.
Furthermore, the Polygon team noted, that it would incentivize Uniswap adoption on Polygon for ensuring liquidity.
“We can consider allocating a significant amount of capital from our treasury to incentivize liquidity. Second, we can employ a number of non-financial activities to help Uniswap on Polygon grow.” the team added.
Nevertheless, the past couple of months were mostly bullish for the crypto sector, which resulted in several new all-time highs, including those of the crypto leader, Bitcoin, and its runner-up – Ethereum.
Layer-two (L2) solutions, especially on Ethereum, have also seen their rise to an all-time high, as data from L2 analytics platform L2beat suggest that the TVL across various layer-two protocols and networks has peaked at $5.64 billion.
Layer-two scalability solutions are designed to lighten the load on Ethereum’s mainnet while offering cheaper and faster transactions, as Ethereum recorded the highest average gas fees in the network’s history due to increased adoption.
Arbitrum has the largest TVL of all L2 solutions, analyzed by L2beat, with 45% of the total share, followed by the dYdX derivatives decentralized exchange (DEX) with $975 million in TVL, and the Loopring L2 DEX is third with $580 million.
Combined, layer-two solution on Ethereum increased their Total Value Locked 110% when comparing October and November of 2021.Ethereum Ethereum news cryptocurrency news crypto news Uniswap Decentralized Exchange TVL Polygon