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30 September 2020

DeFi mainstreaming impossible until DEXs integrate layer 2, experts say

DeFi mainstreaming impossible until DEXs integrate layer 2, experts say

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Clearly, there is a need for viable solutions that can help sustain the growth of DeFi.

which would bring a completely new version of Ethereum to reality, turning it into a proof of stake network with multiple side chains that can work simultaneously to improve transaction throughput and scalability.

Layer 2 solutions work like an additional blockchain that works in tandem with the main network in order to save space.

There are multiple layer 2 solutions available or being worked on with some of the most popular iterations being OMG, Loopring and ZKsync.

Investors might conclude that the strong performance seen from each of these tokens in the month of August is significant as this coincides with DeFi reaching peak activity

This shows the growing demand for cheap transactions on the Ethereum network, which in turn creates demand for these layer 2 tokens. 

While the layer 2 solutions can certainly help Ethereum scale, there are still many challenges ahead and it will take some time for users to interact with these options

However, if the DeFi sector resumes its parabolic growth rate, there will be an urgent need for solutions and this may kickstart the use of protocols like OMG and Loopring. 

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