Layer 2 Be or Layer Not 2 Be
AI summary of the linked articleUniswap's research paper finds that users trading and providing liquidity on Layer 2 chains have seen significant advantages over Ethereum mainnet, even before the Dencun hardfork. It reports that 97.5% of swappers, those with trades under $125,000, did better on other chains when looking at USDC/ETH pools. It also says L2s have at least 75% more liquidity concentration than Ethereum because of lower gas costs, and that full-range LPs on L2s earned an average of 20% more from arbitrage than on mainnet. The article notes that gas costs on Optimism fell from $1.50 to half a cent after EIP-4844 took effect, though it expects costs to fluctuate. |
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1 comment Not a DeFi expert, but I agree with this post. This year, I LPed for the first time. Doing it on Base was great because the TX costs are low, and you can set up many positions, collect fees multiple times, and reinvest them in your LP position. Also, cheaper fees on L2s mean more swapping on DEXs, which leads to better price discovery. Fragmented liquidity is a problem for whales, but I haven't felt too much of an impact as a retail trader. And Superchain is on the horizon. |
