The growing adoption as well as an explosion in DeFi activity has led to cryptocurrency transactions at an all time high. This has inadvertently resulted in the congestion of the most popular network, Ethereum. This in turn has led to the rise of Layer 2 scalability solutions such as Polygon which offer lower transaction time and cost.
Naturally, cryptocurrency exchanges are also integrating with these protocols on the back of both user demand and personal growth. While this includes major Decentralized Exchanges (DEX) such as Sushiswap and Aave, Uniswap has yet to deploy Polygon on its network. The L2 solution’s team has now published a proposal on Uniswap’s Governance Forum to deploy Uniswap protocol to Polygon.
Scalability solutions lighten the load taken on Ethereum’s mainnet, providing cheaper and faster transactions. Polygon currently has around $4.77 billion locked in its protocol, making it “the second strongest DeFi ecosystem, right after Ethereum L1”, according to the proposal.
The proposal also noted that Polygon’s huge growth over the past year has resulted in partnerships with top Ethereum L1s like Aave, Curve, and Sushiswap as well as many smaller DeFi projects. It further noted that Polygon’s DeFi eco-system is “self-sustainable” as it had stopped all liquidity mining incentives some time ago. Yet, “we keep seeing capital and user inflow and very high user retention”, it added.
The proposal also highlighted the benefits Uniswap could have from this deployment, including user base growth, like that experienced by Aave, which has reached over 700,000 active users on Polygon PoS. Additionally, it also noted that a lower fee would encourage more users to interact with the network, leading to higher user activity.
To further attract DEX, the Polygon team also offered to encourage the adoption of Uniswap to Polygon, as the ecosystem seems “incomplete” without DeFi’s “flagship project”. He elaborated,
“We can consider allocating a significant amount of capital from our treasury to incentivize liquidity. Second, we can employ a number of non-financial activities to help Uniswap on Polygon grow.”
This includes participating in the design and execution of cash extraction campaigns and promoting Uniswap V3 as “lego money”.
A similar proposal has previously stemmed from Uniswap’s own community members and had received major support at the time.
In addition to the DEXs mentioned above, centralized exchanges also integrate with Ethereum scalability solutions. Just yesterday, Crypto.com announced that its users can now make ETH deposits and withdrawals through Polygon.
