Uniswap, the leading decentralized exchange (DEX) built on Ethereum's Layer 2 (L2) solutions, has witnessed a staggering surge in trading volume over the past two years, reaching a remarkable 650% growth. According to recent data, Uniswap now accounts for approximately 37% of the total trading volume on L2, representing a significant increase compared to previous years.

Tom Wan, a researcher at 21.co, highlighted this exponential growth in a recent post on X, noting that Uniswap's L2 volume surged from $4 billion in 2022 to over $30 billion in 2024. Wan pointed out that this trend is expected to continue, especially with the emergence of high-quality protocols on Layer 2 networks like Arbitrum, Coinbase's Base, and Optimism.

Wan emphasized that L2 solutions, particularly Base and Arbitrum, have experienced a surge in economic activity, constituting 82% of the total L2 volume on Uniswap. He predicts that the dominance of L2 volume on Uniswap could further increase to 50% by the end of the year.

While Uniswap currently contributes only 2.9% of the total volume on altcoin Layer 1s, Wan anticipates this narrative to evolve. He explained that high-performance Ethereum Virtual Machine (EVM)-compatible Layer 1s, along with a multichain expansion strategy, could enable Uniswap to capture more volume on networks like Sei and Monad.

Despite its success, Uniswap is facing regulatory pressure from the U.S. Securities and Exchange Commission (SEC), as part of a broader crackdown on the crypto-exchange market. The SEC has issued a Wells Notice to Uniswap, signaling a probable enforcement action. However, Uniswap intends to defend itself against what it considers a "disappointing but not surprising" decision.

This regulatory scrutiny comes amid criticism from the crypto industry regarding the SEC's approach, with many arguing that existing securities laws do not adequately address the unique characteristics of blockchain-based technology. SEC Chairman Gary Gensler, however, has defended the agency's actions, asserting that the crypto sector must comply with existing securities laws.

Meanwhile, UNI, the native token of Uniswap, is currently trading at $7.68, demonstrating resilience despite recent market fluctuations.