Uniswap's volume on Layer 2 solutions has soared from $4 billion to $30 billion, showing a remarkable 650% increase over two years. Being the most popular Layer 2 decentralized exchange on the Ethereum network, Uniswap now holds around 37% of the total trading volume on L2, a substantial rise compared to the past.

Remarkable Surge in Uniswap's L2 Volume

Researcher Tom Wan pointed out that Uniswap's Layer 2 volume has grown by more than 650% in the last 24 months, with its volume skyrocketing from $4 billion in 2022 to over $30 billion this year. Wan is optimistic that this upward trend will continue, especially with the introduction of high-quality protocols on Layer 2 networks like Arbitrum, Coinbase’s Base, and Optimism.

Wan's analysis reveals that L2s, particularly Base and Arbitrum, have seen a surge in economic activities, representing 82% of the total L2 volume on Uniswap. He predicts that Uniswap's dominance in L2 volume could reach 50% by the year-end.

While Uniswap accounts for only 2.9% of the total volume on altcoin layer 1s currently, Wan believes this narrative could change with the help of high-performance Ethereum Virtual Machine (EVM)-compatible layer 1s and a multichain expansion strategy to attract more volume on networks like Sei and Monad.

Uniswap's Long-Standing Dominance on Ethereum Layer 1

Uniswap, the initial decentralized exchange on Ethereum, has maintained its top position on the Ethereum Layer 1 blockchain, having facilitated over $2 trillion in cumulative trading volume across 17 chains. DefiLlama data also shows that users have locked in more than $5.5 billion in value on Uniswap.

Coping with Regulatory Pressures

Despite its ongoing success, Uniswap is facing regulatory challenges due to a Wells Notice issued by the U.S. Securities and Exchange Commission (SEC), hinting at a possible enforcement action. However, Uniswap plans to defend itself against what it views as a disappointing yet expected move.

This regulatory scrutiny comes amidst criticism from the crypto industry concerning the SEC's approach, with many arguing that the SEC has pursued enforcement actions without fully acknowledging the unique characteristics of blockchain technology within the crypto sector.

SEC Chairman Gary Gensler has defended the SEC's stance, insisting that existing securities laws are clear and that the crypto industry must comply instead of seeking special treatment.

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