In this article, you will learn everything you need to know before making the switch to trading on Layer 2 (L2) with Kwenta. This article will be frequently updated as we progress through the 3 phases of our transition process.
What is L2?
L2 is a development tool that allows projects built on Ethereum to better scale as adoption for decentralized projects grows. Currently, in periods of high usage, transactions on Ethereum become very expensive and slow. This can make it difficult to use Ethereum-based applications. With L2, Ethereum transactions are processed in a bundle, reducing costs and increasing speed, allowing for more advanced functionality to become feasible with Ethereum-based applications. Kwenta uses Optimism as its L2 solution.
Why move to L2?
By transferring your funds to L2, you will benefit from an estimated 50x reduction in gas fees and blazing fast transactions. On average, L1 users pay ten times more in gas fees than users on L2.
Why wouldn't I want to move to L2?
Layer 2 is a new technology that could encounter unexpected challenges. Due to this risk, you may want to further educate yourself before making the move to L2.
Additionally, returning to L1 from L2 does include some additional steps. Users can leverage bridges, such as the Optimism Gateway or Hop Protocol, but beware that this involves a 1 week long transfer period which may not be desirable for some users.
What is available on L2?
For now, these are the Synths that you can trade on L2:
Synthetix has set the trading fees on L2 synths at 0.4%.
Shorting is not yet available on L2.
How to move to L2
To move to L2, select the "Switch to L2" button in the top right of the interface.
This will trigger a modal which will ask you to change networks from Mainnet to Optimistic Ethereum.
How to move back to L1 from L2
To switch back to L1, click the "Optimism" button in the top right and select "Switch to Layer 1".
How do I transfer ETH to L2?
If you need L2 ETH, you can use Optimism's Gateway to move ETH across L1 to L2. This transaction typically takes a few minutes and has a small gas fee.
How do I move ETH from L2 back to L1?
To withdraw your ETH from L2 and move it back to L1, use Optimism's Gateway and select the withdraw option. Withdrawing your ETH has a small gas fee and takes one week to complete.
How do I get sUSD to trade on L2 Kwenta?
You will need sUSD as it is currently the only Synth that can be easily acquired on L2; once you have L2 sUSD, it can be traded for any other Synth on L2. There are two methods acquire sUSD:
- Mint L2 sUSD on L2 Staking. For a guide on how to mint L2 sUSD, please visit the Synthetix L2 staking article for details.
- Purchase L2 sUSD on L2 Uniswap with L2 ETH. Once you've acquired L2 ETH using the Optimism Gateway, you can visit the ETH/sUSD pool on L2 Uniswap, checkout details in the official Uniswap article on Optimism, and acquire your desired amount of sUSD. Note that liquidity for sUSD is low.
Trading on L2
Once you are on L2, you can freely use the exchange interface as you would on L2. Your Ethereum gas fees will be lower and your transactions will execute faster.
Trade Synths with zero slippage on L2 with Kwenta.
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