Decentralized finance protocols on primary layer-1 blockchain networks are experiencing a migration toward layer-2 scaling architectures. Processing costs on base networks have pushed high-frequency decentralized exchange transactions onto auxiliary networks.
Security Trade-Offs and Liquidity Fragmentation
While transaction throughput has increased tenfold, liquidity remains fragmented across multiple rollup environments. Institutional participants are demanding standardized cross-rollup bridging standards before committing additional treasury funds.