Gas fees plummet off a cliff, and with the mainnet’s liquidity and security advantages, Synthetix, which left three years ago, is once again landing on Ethereum, injecting a key variable into the 2025 DeFi landscape.
(Background recap: The insider story of RWA protocol Ondo Finance’s explosion: BlackRock and Morgan Stanley entering the real-world assets space)
(Additional background: US SEC terminates investigation into Ondo Finance “with no charges”! $ONDO surges past $0.5 in response)

Table of Contents

• Gas fees plummet off a cliff, costs are no longer a pain point
• Deep liquidity, institutional funds lock into the mainnet
• Chain reaction: Layer 2 positioning reshuffled
• Conclusion: Next steps for the mainnet as a financial hub

On December 17, Synthetix announced a full migration back to the Ethereum mainnet, nearly three years after it moved to Layer 2 due to high transaction fees in 2022. Founder Kain Warwick posted a high-profile message that day, stating that the mainnet “now supports high-frequency financial applications.” This decision undoubtedly adds a heavyweight note to the DeFi ( decentralized finance ) market, which has been gradually relaxing its regulatory stance after President Trump’s first year in office.

Gas fees plummet off a cliff, costs are no longer a pain point

According to Etherscan statistics from December 17 to 18, the average Gas price on Ethereum was only 0.71 gwei, compared to 18.85 gwei at the end of 2024, a reduction of about twenty-six times. This comes from upgrades like “Fusaka” completed in November, as well as previous upgrades such as Dencun and Pectra, which significantly increased data capacity and compression efficiency. Previously, executing complex derivatives contracts on the mainnet was described by developers as “financial suicide”; now, with transaction fees no longer eating into profits, Synthetix can regain the advantages of the mainnet.

“We can start over (Run it back). The mainnet now supports high-frequency financial applications, and it holds most of the assets, collateral, and liquidity in the crypto world.”

Warwick’s statement highlights the core of the cost structure reversal: when Layer 1 is no longer expensive, the security layer and settlement layer should return to the same chain, allowing developers not to sacrifice user experience for cost savings.

Deep liquidity, institutional funds lock into the mainnet

Beyond transaction fees, Synthetix cares more about liquidity fragmentation. Over the past three years, Layer 2 solutions like Optimism, Arbitrum, and Base have operated like offshore financial centers, with bridging costs and security risks hindering institutional funds from flowing in. Synthetix’s launch of perpetual contracts DEX (Synthetix Perps) and the SLP liquidity module adopts a “off-chain matching, on-chain clearing” approach, entrusting transaction speed to servers and ultimate security to the mainnet. For large positions, only the mainnet has enough depth to reduce slippage, which is the key reason institutions are willing to return.

Chain reaction: Layer 2 positioning reshuffled

Warwick boldly stated, “If no one follows us within 20 minutes, that’s not Synthetix’s style,” and the market immediately sensed a domino effect. In the short term, more protocols leaving the mainnet will need to reassess costs and liquidity; in the long term, Layer 2 will focus on high-frequency, small-value consumer applications, while high-value settlements can return to the mainnet as costs decrease. This is not a negation of Layer 2 but a clarification of their roles as “high-speed front-end lanes and mainnet settlement layers.”

Conclusion: Next steps for the mainnet as a financial hub

Since the “Merge” in 2022, the Ethereum community has been waiting for a Layer 1 that is both secure and affordable. Now, they are finally approaching the finish line. Synthetix’s return symbolizes the evolution of the mainnet from an expensive “bank vault” to a financial hub with both efficiency and deep liquidity. Analysts point out that if Gas Limit further increases to 180 million in 2026, Ethereum’s position as a global financial settlement center will be even more solidified. For investors, this wave of “return to the mainnet” could reshape valuation formulas in DeFi and lay the groundwork for the next wave of innovation.