About $4.23 billion in transactions were settled on Arbitrum last week, compared to $8.4 billion on Ethereum.
The average number of transactions on all L2s is higher than Ethereum mainnet transactions.
Ethereum [ETH] The volume dominance of the decentralized exchange (DEX) on the 90-day moving average fell in April for the first time since late 2021, according to a tweet from blockchain analytics firm Messari. This marked a noticeable shift to layer 2 solutions (L2) and other layer 1 chains.
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DEX volume share on Ethereum fell below 70% in April, down from its multi-year high of nearly 80% as USD Coin’s [USDC] depegging caused the stir of the wider DeFi market.
2/ For the first time since the end of 21′, Ethereum’s 90-day moving average for DEX trading volume has begun to decline.
— Messari (@MessariCrypto) April 24, 2023
L2s are gaining prominence
According to data from DeFiLlama, Ethereum remained the most preferred chain for DEXs with a cumulative trading volume of over $1 trillion at the time of writing. However, in the first quarter of 2023, the popularity of scaling solutions such as Arbitrum grew [ARB].
Weekly volume on Arbitrum has been on a steady upward trend since the start of 2023, peaking at $5.33 billion in March, just before the AirDrop of ARB tokens. About $4.23 billion worth of transactions were handled on Arbitrum last week, compared to $8.4 billion on Ethereum, indicating that the L2 solution was making huge strides.
Some of the other L2s, such as Optimism [OP], also experienced significant growth. At the time of writing, it was the sixth largest chain in terms of DEX volume in the past 24 hours. In line with previous observations, volume reached an all-time high of $245.77 million during USDC depegging.
Ethereum’s dominance to decline further?
With the launch of more rollups like zkSync Era and Polygon [MATIC] zkEVM, the interest in scaling solutions has never been greater. Messari research analyst Chase Devens opined that DeFi operations moving to L2s could be the start of a long-term trend as customers benefit from lower costs and faster transactions without sacrificing security.
April marked the first time since late 2021 that Ethereum’s DEX volume dominance has fallen to the 90D moving average.
This is expected to be the start of a long-term trend – unlike the 2022 flight away from alt L1s, DEX business need not return to… pic.twitter.com/OhSFeI31ur
— Pursuit (@chasedevens) April 24, 2023
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The idea was supported by data from L2Beat, which showed that after being neck-and-neck for most of 2023, the average number of transactions on all L2s is higher than Ethereum mainnet transactions. At the time of writing, L2s was processing an average of 31 transactions per second, compared to Ethereum’s 10 per second.
There was also relief in terms of transaction costs. According to L2 fees, investors only needed $0.10 to send ETH on Arbitrum One, $0.27 on Optimism, and $0.21 on Polygon zkEVM. On the other hand, users would have to pay $1.19 to send ETH on the mainnet and almost $6 to exchange tokens.
This post Ethereum [ETH] falls on this front; the reason will not surprise you
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