DeFi projects are flocking towards the class

Decentralized financial protocols (DeFi) are racing to roll out Layer 2 scaling solutions as Ethereum gas fees skyrocket and the network struggles on demand.

Popular DeFi platforms including Uniswap, Aave and Synthetix are getting closer to implementing scaling solutions.

Synthetix - an on-chain data aggregation protocol that tracks the value of real-world assets - will upgrade to the original version of the Layer 2 scale today (September 24).

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According to a blog post by founder Kain Warwick, the ‘Fomalhaut’ upgrade is the first stage of the transition to Layer 2 to Optimistic Ethereum. It is an incentive test network that aims to reduce gas costs for small SNX stakers who have to pay hundreds of dollars in fees to receive weekly rewards.

The second upgrade called ‘Deneb’ will take place on September 29, also includes measures to reduce gas charges. Warwick added:

Both of these releases are responses to the rising gas fees issue caused by Ethereum network congestion. Some of the changes are stop-gaps while we transition to Optimistic Ethereum, the inclusion of these two releases is the first step towards Layer 2 Synthetix.

A hybrid approach with class 2 is likely to bring Synthetix out later this year, he concluded. The optimistic improvement is a Layer 2 solution that can scale Ethereum smart contracts and dApps up to 2000 transactions per second.

The world's leading DeFi DEX, Uniswap is also undergoing a major upgrade with the Uniswap V3. When asked earlier this year, Uniswap founder Hayden Adams said that the V3 will ‘fix things’ implied that class 2 could be a key part of the upgrade.

There was a basic demo of the layer 2 version of the swap token protocol running at unipig.exchange.

The London-based loan protocol Aave - the second most popular DeFi protocol by total locked value - is preparing to launch a second version of the platform, which also aims to reduce transaction fees.

In a blog post last month, Aave stated that their ‘aTokens’, minted to represent crypto collateral on the platform, will integrate the EIP 2612 for gas-free approval. The Ethereum Improvement Proposal (EIP) allows transactions related to ERC-20 operations to be paid for with tokens itself instead of accumulating ETH gas.