With the soaring gas fees of Ethereum and the network struggling as demand rises, many decentralized finance (DeFi) protocols are racing to implement layer 2 scaling solutions.
Popular DeFi platforms including Uniswap, Aave and Synthetix are getting closer to launching their own scaling solutions.
Synthetix is an on-chain synthetic asset protocol that tracks the value of real-world assets. It will be upgraded to an original version that implements L2 extensions on September 24.
According to a blog post by Synthetix founder Kain Warwick, the “Fomalhaut” upgrade is the first stage of the L2 migration to Optimistic Ethereum. This is an incentive test network designed to ease the gas cost of small SNX mortgagers, who currently need to pay hundreds of dollars in processing fees when collecting rewards every week.
On September 29, Synthetix will perform a second upgrade, called “Deneb”, which also includes measures to reduce gas costs. Warwick added:
“These two upgrade releases are to directly respond to the increase in gas costs caused by the congestion of the Ethereum network. When we transitioned to Optimistic Ethereum, some of the changes were clear at a glance, and the changes included in these two versions are towards L2 The first step for Synthetix.
He concluded that the L2 hybrid approach is likely to extend Synthetix until the end of this year. Optimistic rollups are L2 solutions that can scale Ethereum smart contracts and dApps to 2000 transactions per second.
As the world’s leading DeFi DEX, Uniswap is also developing Uniswap V3 and looks forward to major upgrades. When asked about V3 earlier this year, Uniswap founder Hayden Adams said that V3 will “solve all problems”, which means that L2 may be an important part of its upgrade.
There is already a basic demonstration of the L2 version of the token exchange protocol on unipig.exchange. Unipig, which uses Optimistic rollups, was launched in October 2019.
The London-based lending agreement, Aave, is the second most popular DeFi agreement in terms of total value lock-in, and it is preparing to launch a second version of the platform, which will simplify operations to reduce transaction costs.
Aave stated in a blog post last month that its “aTokens” (used to denote crypto-collateralized assets on the platform) will integrate the Ethereum Improvement Proposal (EIP) 2612 for zero gas transaction approval. This EIP allows transactions involving ERC-20 operations to be paid using the token itself instead of gas accumulation ETH.
“The short-term goal is to promote the adoption of aToken, and Aave is actively studying its introduction into L2.”
The post did not provide more details about which L2 solution will be adopted, nor does it provide a timeline for the release of Aave v2.