Synthetix Returns To Ethereum Mainnet After 3 Years: ‘we Can Run It...

Synthetix founder Kain Warwick expects other perpetual decentralized exchanges to follow Synthetix back to Ethereum, which is faster than ever.

Perpetuals trading platform Synthetix is returning to Ethereum’s mainnet, with its founder arguing the network is now more than capable of supporting high-frequency financial applications after years of network congestion drove derivatives activity elsewhere.

“By the time perp DEXs became a thing, the mainnet was too congested, but now we can run it back,” Synthetix founder Kain Warwick told Cointelegraph during an interview on Wednesday.

“It’s kind of crazy that there really hasn’t been a Perp DEX on mainnet,” he added, explaining that reduced demand after the perp DEX exodus, combined with ongoing scaling improvements, has made Ethereum layer 1 more viable again.

“It’s definitely the best place to run a perp DEX,” he said.

Warwick said that high gas fees and network congestion previously made it impractical to operate complex trading infrastructure on the network.

For several years, many perpetual platforms migrated to layer-2 networks or alternative blockchains, and Synthetix followed a similar path, he said, moving to the Ethereum layer-2 network Optimism in 2022 and later expanding to Arbitrum and Base.

Around the same time, decentralized derivatives exchange dYdX transitioned from mainnet to StarkWare layer-2 solution StarkEx.

Warwick said it wasn’t feasible to run critical infrastructure because the costs were “just too high.”

“The cost per transaction and therefore the efficiency of the markets on the chain really degraded,” Warwick said. On Wednesday, Ethereum’s average gas fee stood at approximately 0.71 gwei, nearly 26 times lower than on the same day twelve months ago, when it averaged 18.85 gwei, according to Etherscan.

Source: CoinTelegraph