Uniswap DEX Captures 37% of Ethereum L2 Volume

Uniswap, the most widely used Layer 2 decentralized exchanges (DEXs) built on Ethereum, now accounts for approximately 37% of the total trading volume on L2.

This represents a remarkable increase compared to the trading volumes observed two years ago.

Uniswap L2 Volumes Surged Over 650%

In a post on X, Tom Wan, a researcher at 21.co, noted the growth of Uniswap’s layer 2 (L2) volume, which has surged by more than 650% over the past 24 months. This increase saw its volume climb from approximately $4 billion in 2022 to over $30 billion this year.

.@Uniswap‘s trading volume is growing on L2s and currently contributes to 37% of the total volume

Since 2022, Uniswap’s volume on L2s has grown from $4B to $30B (+650%). Uniswap’s L2s volume in 2022 only contributes to 5.2% of the total volume

L2s have been gaining more… pic.twitter.com/PR7GT9xdih

— Tom Wan (@tomwanhh) April 29, 2024

Wan suggested that this trend could continue to strengthen, especially with the launch of more quality protocols on Layer 2 networks such as Arbitrum, Coinbase’s Base, and Optimism.

According to Wan, L2s, notably Base and Arbitrum, have witnessed a surge in economic activities, accounting for 82% of the total L2 volume on Uniswap. Wan anticipates that the dominance of L2 volume on Uniswap will likely grow to 50% by the end of the year.

Although Uniswap has contributed only 2.9% of the total volume on altcoin layer 1s, Wan believes this narrative could evolve. He explained that high-performance Ethereum Virtual Machine (EVM)-compatible layer 1s, combined with a multichain expansion strategy, could enable the DEX to capture more volume on networks like Sei and Monad.

Uniswap, the first decentralized exchange on Ethereum, continues to maintain its position as the largest on-chain trading venue on the Ethereum Layer 1 blockchain. The protocol has facilitated over $2 trillion in cumulative trading volume across 17 chains. According to DefiLlama data, users have deposited more than $5.5 billion in total value-locked on Uniswap.

Uniswap Faces SEC Regulatory Pressure

Uniswap, amid its ongoing success, is facing regulatory pressure from the U.S. Securities and Exchange Commission (SEC) as part of a broader regulatory crackdown on the crypto-exchange market.

The SEC has issued a Wells Notice to Uniswap, indicating a probable enforcement action. Despite this development, Uniswap intends to defend itself against what it considers a “disappointing but not surprising” decision.

This lawsuit comes amid widespread criticism from the crypto industry regarding the SEC’s approach. Many argue that the SEC has been operating in bad faith. Critics contend that the SEC has pursued enforcement actions without considering the unique characteristics of blockchain-based technology in the crypto sector.

In response, SEC Chairman Gary Gensler has defended the SEC’s actions, asserting that existing securities laws are clear and that the crypto sector has sought special treatment while failing to comply.

Meanwhile, UNI is trading at $7.68, up 0.9% in the last 24 hours but down 6% over the last week.