Synthetix (SNX) Leads Ethereum DeFi Protocols in Adopting Layer-2 Solutions
Admittedly, Ethereum has a fee problem. Because of its inability to scale, the average transaction costs fee remains prohibitive. As a result, leading DeFi protocols like Synthetix, Aave, and Uniswap–the largest decentralized exchange, plan to implement off-chain solutions to scale their service and vent the mainnet.
The Synthetix Upgrade
Today (Sept 24), Synthetix will upgrade to leverage a barely tested but secure Layer-2 solution, Optimistic Ethereum, in exchange for lower fees and better user experience for traders. Two improvement proposals will be activated.
According to a blog post shared on Sept 22, the DeFi protocol will activate Fomalhaut on Sep 24. After that, on Sept 29, the final upgrade, Deneb, will be implemented. Notably, Fomalhaut will eliminate transaction fees for small SNX stakers who had to contend with high Gas fees in the recent past.
According to Kain Warwick, the Founder of Synthetix, both upgrades highlight the protocol’s determination to enhance their user experience by adopting means of drastically slashing transaction fees due to Ethereum congestion.
“I strongly believe that the transition of much of DeFi to the OVM will be an inflection point where DeFi is no longer a whale game but is accessible to anyone to both build on and use.”
Uniswap, Aave to Follow Suit
Uniswap, on the other hand, also plans to release the third version of their code with plans of integrating Layer-2 solutions and make the DEX trading experience more simplified and cheaper.
Meanwhile, Aave has similar plans. Their second release will integrate EIP 2612—an economic abstraction supportive improvement, allowing payment of fees in aTokens instead of ETH.
This not only pushes aToken adoption but goes a long way to attract more users to trustless swapping protocols where they stand to earn rewards for their participation.
As of Sept 23, Etherscan data showed that Ethereum’s utilization rate stood at 97 percent. Meanwhile, the average transaction fee in USD stands at roughly $3.
The Matic Network is among the many platforms where DeFi dApps can deploy as a Layer-2 solution. As BTCManager earlier reported, the network partnered with Gitcoin to foster its mainnet adoption.