Synthetix Makes a Comeback to Ethereum Mainnet After Three Years

Summary:
Perpetual trading platform Synthetix is re-establishing its presence on the Ethereum mainnet, with its founder, Kain Warwick, asserting that the network can now efficiently support high-frequency trading. After years of network congestion that pushed derivatives activities to other platforms, advancements in Ethereum’s scalability have made it a more suitable option. The founder predicts that several perpetual decentralized exchanges (DEXs) will soon follow suit back to the mainnet.

Key Takeaways

Synthetix is returning to the Ethereum mainnet after three years, citing improved scalability for high-frequency trading.
Founder Kain Warwick emphasized the network's enhanced capacity and reduced gas fees as key factors.
Previous challenges like high gas fees led many perpetual trading platforms to migrate to layer-2 solutions or other blockchains.
Other DEXs are likely to return to the mainnet, as most liquidity resides on Ethereum.

Synthetix makes a comeback to Ethereum mainnet after three years

Synthetix's Return to Ethereum

Perpetual trading platform Synthetix has announced its return to the Ethereum mainnet after a hiatus of three years. During a recent interview with Cointelegraph, founder Kain Warwick pointed out that the Ethereum network is now well-equipped to handle high-frequency financial applications, a significant shift from the congestion that previously pushed derivatives activities to other platforms.

“By the time perp DEXs became a thing, the mainnet was too congested, but now we can run it back,” Warwick stated.

Warwick explained that the reduced demand for perpetual DEXs, combined with ongoing improvements in Ethereum’s scaling, has revitalized the viability of the Ethereum layer 1. “It’s definitely the best place to run a perp DEX,” he added.

Cryptocurrencies, Synthetix
Source: Synthetix

Addressing Previous Challenges

Warwick reflected on the challenges posed by high gas fees and network congestion that made it impractical to run sophisticated trading infrastructure on the Ethereum network. For several years, many perpetual trading platforms moved to layer-2 networks or alternative blockchains. Synthetix made a similar transition, switching to the Ethereum layer-2 network Optimism in 2022 and subsequently expanding to Arbitrum and Base. This shift coincided with the decentralized derivatives exchange dYdX’s transition from the mainnet to StarkWare’s layer-2 solution, StarkEx.

High Costs Made Operations Difficult

In Warwick’s view, the high operational costs were prohibitive. He noted, “The cost per transaction and therefore the efficiency of the markets on the chain really degraded.” As of Wednesday, Ethereum’s average gas fee was around 0.71 gwei—significantly lower than the 18.85 gwei average from a year ago, according to Etherscan.

Cryptocurrencies, Synthetix
Ethereum gas fees are significantly lower than they were twelve months ago. Source: Ether Scan

Warwick believes that the combined scaling solutions of layer-1 and layer-2 networks enable the operation of critical infrastructure on the mainnet once more. Some Ethereum advocates predict further improvements in network capacity by 2026, with Ethereum educator Anthony Sassano asserting that the goal of raising Ethereum’s gas limit to 180 million next year serves as a baseline expectation.

Future of Perpetual Exchanges on Mainnet

Warwick anticipates that other perpetual DEXs will soon follow Synthetix back to the Ethereum mainnet. He argues that the current network capacity can support multiple perp DEXs simultaneously.

“It wouldn’t be a Synthetix launch if someone didn’t try and, you know, follow us within 20 minutes,” he remarked.

Warwick pointed out that the majority of liquidity in the cryptocurrency realm resides on Ethereum’s mainnet, which houses most of the assets, margin, and liquidity necessary for trading. “It is the most efficient on-chain market,” he asserted.

He also noted that Ethereum’s development has made significant strides in 2025, potentially marking it as the best year for the network since the Merge in September 2022. “There’s been a renewed focus on the needs of builders, which previously was more centered around the network itself,” he concluded.

[Magazine: Big questions: Would Bitcoin survive a 10-year power outage?]