Ethereum News Today: Scalability and Compliance Drive Crypto Liquidity to Layer 2 Networks

The cryptocurrency market is witnessing a significant reallocation of liquidity toward Layer 2 solutions, driven by cross-chain innovation and institutional adoption. As of late 2025, decentralized exchanges (DEXs) built on Layer 2 networks, particularly Solana-based platforms, have captured 48% of total DEX trading volume, according to the OKX State of DEX 2025 report. This surge reflects retail trader activity concentrated on high-throughput, low-cost ecosystems like Solana, while Ethereum's Layer 2 solutions remain dominant for high-value trades exceeding $50,000.

The shift is underscored by Ethereum's continued dominance in liquidity pool quality, with Ethereum and its Layer 2s securing 10 of the top 20 spots in total value locked (TVL). Base and Arbitrum, Ethereum's Layer 2s, accounted for five and two of these positions, respectively. Meanwhile, Solana's TVL grew by 30% in Q3 2025, reaching $30.5 billion, with DEX volume hitting $365 billion-a 18% increase from the prior quarter. This growth is attributed to projects like Jupiter Lend, which attracted $1 billion in TVL within days of its launch.

Cross-chain interoperability is accelerating the flow of liquidity to Layer 2. The OKX report highlights that DEX-to-CEX migration increased by 18.9% as users seek hybrid compliance models that balance regulatory compliance with decentralized infrastructure. Ethereum-based DeFi applications, for instance, have seen a 31% rise in adoption of Layer 2 solutions to navigate MiCA compliance costs. Additionally, cross-chain bridges, such as those developed by Fluid and Jupiter, are enabling seamless asset transfers between Ethereum, Solana, and other chains, reducing friction for traders.

Stablecoins are a key driver of liquidity in Layer 2 ecosystems. USDC and algorithmic stablecoins like USDe have seen a 19% liquidity surge in Q3 2025, as users prioritize regulated alternatives to non-compliant assets. The rise of Layer 2-native stablecoins, such as USDH on Hyperliquid, further underscores the demand for scalable, low-cost payment rails. This trend aligns with broader institutional interest in DeFi, with institutional adoption of MiCA-compliant protocols growing by 41.2% in 2025.

The market's structural shift toward Layer 2 is also evident in derivatives trading. Platforms like Aster and Hyperliquid have reported record quarterly fees, with Aster's DEX volume peaking at $85 billion in September 2025. These platforms leverage Layer 2's scalability to handle high-frequency trading, reducing reliance on centralized exchanges for leverage. Meanwhile, Ethereum's Layer 2 derivatives protocols, such as dYdX and Hyperliquid, have attracted $7.2 billion in TVL, signaling a broader acceptance of decentralized infrastructure.

The return of liquidity to Layer 2 solutions marks a maturation of the crypto market, where scalability, compliance, and interoperability are no longer mutually exclusive. As institutional and retail participants increasingly adopt these solutions, the competitive landscape for DeFi is evolving, with Ethereum and Solana emerging as dominant but complementary forces in the next phase of blockchain innovation.