Uniswap is actively expanding its presence on layer two (L2) chains despite fears of a slowdown in September. Over the past 12 months, there has been a shift to L2 due to the demand for lower fees.
Uniswap's Achievements on L2 Chains
Over the past 12 months, Uniswap V3 has increased its presence on L2 chains. In September, the leading decentralized exchange registered triple the trading volume compared to the same month last year. Uniswap carried $11.68 billion in swaps, compared to $4.29 billion in September 2023. During this time, Uniswap expanded its presence to 23 chains, with Base and Arbitrum dominating due to low fees and active marketing. Soon after its launch, Base began displacing liquidity pools for Ethereum, mainly due to the creation of meme tokens. As a result of DEX's vibrancy, Uniswap reached $43.28 million in monthly fees. While there was a slowdown in September, the past few months were the most successful in the exchange's history.
Comparison of Base and Arbitrum
The past year also saw significant expansion of Uniswap on the Celo protocol. While Celo remains an L1 chain, it may transform into an L2 to better align with Ethereum. Uniswap's growth on L2 reached more than 20X since 2021. In 2024, Uniswap will have to break its own record of $192 billion in annual trades. At the same time, Ethereum remains the layer that still carries $3.72 billion in value locked due to legacy pools and pairs. Arbitrum leads in volumes, but Base has the most pools. Uniswap V3 on Arbitrum carries 251 coins in 485 pairs, while on Base, it has 338 coins and tokens in 694 pairs. One of Base's biggest problems is the presence of low-liquidity pairs. The last few months have seen the creation of multiple pools, most of which are now inactive.
Gas Usage and Competition
Despite the shift to L2, Uniswap continues to rely on Ethereum. The Uniswap routing service is the most used L1 smart contract. Fees on Uniswap reached about $45K per hour or $896K in the past 24 hours. Ethereum itself carries 37.7% of all DEX volumes. Uniswap now faces competition from other DEXs that have also grown over the past year. The leading market still holds a 45% share of the entire DEX market. Other projects like Aerodrome are quickly catching up with a 20.6% share. CurveDEX is also building its volumes, already carrying $1.78 billion in liquidity.
Uniswap continues to strengthen its presence on L2 chains, achieving significant success and setting new records. However, competition in the DEX market is becoming increasingly intense, and Uniswap will need to maintain its leadership amid the active growth of other platforms.
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