Uniswap Creator Highlights Risk of Ethereum L1 DeFi Concentration Potentially Ceding Market Advantage to Solana

As of April 2025, Hayden Adams, the founder of Uniswap, has expressed concerns regarding Ethereum’s continued emphasis on Layer 1 decentralized finance (DeFi) development. He suggests this strategic focus might create an opening for competing blockchains like Solana to gain dominance in the DeFi sector. Adams points to Solana’s growing ecosystem and technological advantages as potential factors that could enable it to surpass Ethereum in DeFi adoption and innovation if current trends persist. This warning comes amid ongoing debates about blockchain scalability, transaction costs, and network efficiency in the rapidly evolving Web3 landscape.

Solana advances as Ethereum fights to keep up

While Ethereum continues to evolve its L2 ecosystem, Solana is gaining traction with its streamlined layer 1 capabilities.

As Ethereum iterates toward its robust L2 ecosystem, Solana takes on its nimble layer 1 approach. Ethereum is still the DeFi king, with almost $47 billion in its ecosystem.

Adams said Solana’s approach makes more fundamental sense for executing DeFi directly on its base layer without the need for separate off-chain scaling solutions.

According to Adams, Solana’s approach is inherently better suited for executing DeFi directly on its base layer, bypassing the complexities of off-chain scaling solutions.

Ethereum has been committed to L2 development since 2020, leaning into rollups and modular scaling as gas fees and congestion plagued its layer 1. However, this focus has come under scrutiny, with some community members advocating for renewed investment in base-layer upgrades—a shift Adams vehemently opposes without clear consensus and direction.

There is building frustration with Ethereum’s ecosystem. Just a few months ago, Max Resnick, an Ethereum CORE developer, left the project for Solana. He cited a “rigid developer community” in Ethereum and slow-scale efforts at Layer 1 as reasons for his decision.

Other DeFi platforms on Solana are soaring. Raydium, a Solana-based exchange, overtook Uniswap in the biggest trade volume grab in 2020. Raydium has processed $122 billion of trades over 30 days versus Uniswap’s $96 billion of trades over the same period, per DeFiLlama.

Solana continues to attract users and developers with its low fees and extremely fast speeds of over 4,000 transactions per second. Recent developments include launching a Solana ETF in Canada and staking deposits skyrocketing to boost Solana’s price beyond $135. 

Uniswap signals readiness for layer 1-focused scaling

The Uniswap founder recently made it clear that he is still open to a pivot towards a layer 1-centric scaling strategy, but only if done intentionally and realistically, with major modifications to the network.

He also pointed out that Uniswap’s biggest market share remains in layer 1, so such a pivot would still represent a strategic victory for the project. That said, he noted that these methods place them on a path towards greater centrality of nodes and reduce the margin for individuals to run full nodes.

Ethereum is facing its worst quarterly price performance in nearly a decade as the debate over the network’s scaling future heats up. ETH now has its sights set on a $1,600 breakout, struggling to remain atop the $2,000 key psychological threshold.

In notable news, TRON founder Justin Sun has said he is not selling his ETH holdings following the latest price falls. Instead, he pledged to collaborate with Ethereum developers as they attempt to spur ecosystem growth.

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