Uniswap's Layer 2 Trading Volume Soars by Over 650%

According to CryptoPotato, Uniswap, a leading Layer 2 decentralized exchange (DEX) built on Ethereum, now accounts for about 37% of the total trading volume on Layer 2. This is a significant increase compared to the trading volumes seen two years ago. Researcher Tom Wan from 21.co noted that Uniswap's Layer 2 volume has surged by more than 650% over the past 24 months, climbing from approximately $4 billion in 2022 to over $30 billion this year. 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. Layer 2s, particularly Base and Arbitrum, have seen a surge in economic activities, accounting for 82% of the total Layer 2 volume on Uniswap. Wan anticipates that the dominance of Layer 2 volume on Uniswap will likely grow to 50% by the end of the year. Despite contributing only 2.9% of the total volume on altcoin layer 1s, Wan believes this narrative could evolve. 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. Users have deposited more than $5.5 billion in total value-locked on Uniswap, according to DefiLlama data. However, Uniswap 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, Uniswap plans 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. Critics argue that the SEC has pursued enforcement actions without considering the unique characteristics of blockchain-based technology in the crypto sector. 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.