Gas fees have dropped dramatically, and with the mainnet’s superior liquidity and security, Synthetix is making its return to Ethereum after three years—introducing a major shift for DeFi in 2025.

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On December 17, the derivatives protocol Synthetix announced it would fully migrate back to the Ethereum mainnet—three years after moving to Layer 2 in 2022 due to high transaction fees. Founder Kain Warwick made a bold statement, asserting that the mainnet is now “sufficient to support high-frequency financial applications.” This move, coming a year into the Trump administration amid easing regulatory attitudes, marks a significant milestone for the decentralized finance (DeFi) market.

Gas Fees Plummet—Costs Are No Longer a Barrier

According to Etherscan data from December 17–18, Ethereum’s average gas price was just 0.71 gwei, down from 18.85 gwei at the end of 2024—a reduction of about 26 times. This drop followed the November “Fusaka” upgrade and earlier enhancements like Dencun and Pectra, which significantly increased data capacity and compression efficiency. Previously, developers described running complex derivatives contracts on mainnet as “financial suicide.” Now, with transaction fees no longer eating into profits, Synthetix can once again capitalize on mainnet advantages.

“We can run it back. The mainnet is now sufficient for high-frequency financial applications, and it holds the majority of crypto assets, collateral, and liquidity.”

Warwick’s remarks highlight the core of this cost structure shift: when Layer 1 is no longer expensive, both security and settlement can return to the same chain, allowing developers to deliver a better user experience without sacrificing cost efficiency.

Deep Liquidity: Institutional Capital Returns to Mainnet

Beyond fees, Synthetix is even more concerned about fragmented liquidity. Over the past three years, Layer 2s like Optimism, Arbitrum, and Base have operated like offshore financial centers, each running independently. High bridging costs and security risks kept institutional funds on the sidelines. This time, Synthetix is launching its perpetual contract DEX (Synthetix Perps) and SLP liquidity module, using “off-chain matching and on-chain settlement.” This design lets servers handle trade speed while the mainnet secures final settlement. For large positions, only mainnet liquidity is deep enough to minimize slippage—a key reason institutions are coming back.

Chain Reaction: Layer 2 Roles Are Being Redefined

Warwick stated, “If no one follows us within 20 minutes, it’s not Synthetix’s style,” triggering an immediate domino effect in the market. In the short term, more protocols that left mainnet will reassess their costs and liquidity. Over the long term, Layer 2s will focus on high-frequency, low-value consumer applications, while high-value settlements can move back to mainnet as costs drop. This doesn’t undermine Layer 2s; instead, it clarifies their roles: Layer 2s as high-speed front ends, and mainnet as the settlement layer.

Conclusion: What’s Next for the Mainnet Financial Hub?

Since the 2022 Merge, the Ethereum community has been waiting for a Layer 1 that is both secure and affordable. That goal is now within reach. Synthetix’s early return signals mainnet’s transformation from an expensive “bank vault” into a financial hub that offers both efficiency and deep liquidity. Analysts note that if the gas limit rises to 180 million in 2026, mainnet’s position as a global financial settlement center will only be strengthened. For investors, this “mainnet comeback” could reshape DeFi valuation models and set the stage for the next wave of innovation.

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