TLDR
- Synthetix returns to Ethereum’s mainnet after 3 years of Layer-2 solutions.
- Reduced gas fees and scaling improvements make Ethereum viable again.
- Ethereum now offers the most efficient on-chain market for perpetual DEXs.
- Synthetix founder Kain Warwick predicts other perpetual DEXs will follow.
After three years of operating on Layer-2 networks, Synthetix has announced its return to the Ethereum mainnet. The decision is seen as a response to Ethereum’s growing scalability and reduced gas fees, which have made it more viable for high-frequency financial applications like decentralized perpetual exchanges (perp DEXs). Kain Warwick, the founder of Synthetix, stated that the network’s improvements over the past year have made it a more efficient and accessible platform for complex trading operations.
Previously, Ethereum’s congestion and high gas fees made it impractical for platforms like Synthetix to operate efficiently. The move to Layer-2 networks, such as Optimism and Arbitrum, was a necessary step to mitigate these issues. However, with Ethereum now supporting high-frequency applications at lower costs, the mainnet has once again become an attractive option for such projects.
Improved Network Capacity and Lower Gas Fees
When Synthetix migrated to Layer-2 networks in 2022, Ethereum’s gas fees were prohibitively high. Gas fees averaged 18.85 gwei, making transactions costly and inefficient for complex infrastructure. As a result, many decentralized finance (DeFi) platforms, including Synthetix, shifted to Ethereum’s Layer-2 solutions to reduce costs and maintain operational efficiency.
However, the situation has changed significantly over the past year. Ethereum’s average gas fee has decreased to approximately 0.71 gwei, a nearly 26-fold reduction from the previous year. This drop in transaction costs, combined with scaling improvements such as Ethereum’s transition to proof-of-stake and the upcoming upgrades for 2026, has made Ethereum’s mainnet a much more viable option for critical infrastructure like perpetual DEXs.
The Return to Ethereum’s Mainnet
Kain Warwick highlighted that the main advantage of returning to Ethereum’s Layer-1 network is its access to liquidity, assets, and margin. According to Warwick, Ethereum remains the most efficient on-chain market, with the majority of the crypto industry’s liquidity and assets concentrated on the mainnet. He further pointed out that, due to its improved scalability, Ethereum can now support multiple perpetual DEXs without issues.
While Synthetix is the first major perpetual DEX to return to the mainnet, Warwick anticipates that other platforms will follow suit. He emphasized that many crypto assets and liquidity are already present on Ethereum, making it the ideal environment for such exchanges. The improved network and reduced gas fees have made it feasible for other exchanges to migrate back as well.
Future Prospects for Ethereum’s Ecosystem
Warwick believes that Ethereum’s development in 2025 has been one of the network’s best years since the Merge in 2022. He noted a renewed focus on supporting builders, particularly those developing high-performance applications like DEXs and financial platforms. This shift is seen as crucial for the continued growth of Ethereum’s ecosystem, with Warwick expecting the network to become even more efficient in the coming years.
With further scaling improvements planned for 2026, such as a significant increase in Ethereum’s gas limit, Ethereum’s role as the leading blockchain for DeFi platforms appears secure. Synthetix’s decision to return to the mainnet signals a broader trend that could see more projects moving back to Ethereum as it becomes increasingly capable of handling complex decentralized applications at scale.
In summary, Synthetix’s move back to Ethereum’s mainnet marks a significant moment for the platform and Ethereum’s ongoing evolution. As the network continues to improve, more DeFi projects may follow Synthetix’s lead, bringing further innovation and activity back to the Ethereum ecosystem.
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