Important insights:
- The arbitrum consumption of Curve Finance has fallen under 2% of its total TVL, which leads to sustainability problems.
- A new proposal proposes to reduce all L2 developments due to a low return over 24 chains.
- Ethereum continues to dominate the costs, the volume and governance of Curve; L2s hardly hold.
Curve Finance, a decentralized exchange (DEX) known for stablecoin and swaps with low slippage, can close the store on arbitrum and possibly also other Layer 2 (L2) networks.
A new proposal on Curve’s Governance Forum suggests that all future L2 implementations are killed. And if you check the numbers, that call does not come out of nowhere.
Arbitrum TVL is shrinking quickly
To understand what goes wrong, start with the total value locked (TVL), which shows how many money users have deposited into the smart contracts of Curve.
On August 4, Curve’s TVL on Arbitrum was only $ 52.6 million. For comparison, Ethereum, the original basic chain for Curve, had more than $ 3.1 billion. That is not a typo. Arbitrum now hardly matters 1.6% of the total TVL from Curve, and it drops.
Curve Finance TVL by chain source: Defillama
Arbitrum is one of the most popular Ethereum L2s and offers cheaper and faster transactions by discharging data from the main chain of Ethereum.
Despite its wider adoption, the presence of curve has faded there. Other chains such as base, Fraxtal and Sonic don’t do much better either.
Curve’s TVL on all combined L2S is less than 3% of its Ethereum TVL. That is a big warning sign for curve about arbitrum and its other L2 implementations.
Trade volume does not help either
TVL tells you where the money is parked, but what about activity? Let’s look at the 24-hour Dex volume of Curve on August 4. Ethereum has drawn $ 304 million. Arbitrum?
Only $ 3.6 million. Even Sonic, a much newer chain, clocked $ 2.1 million. That is not only bad; It is irrelevant borderline in the larger whole.
Curve Finance Dex Volume Source: Defillama
Dex volume measures how much trade actually happens.
Curve specializes in Stablecoin swaps such as USDC, USDT, DAI and CRVUSD, and usually thrives on a high, consistent volume. But Arbitrum does not deliver.
When you zoom out at the 30-day DEX volume, Curve generally processed around $ 7.7 billion. The bulk came from Ethereum. Arbitrum didn’t even scratch the surface. His role as a commercial hub for Curve fades quickly.
Proposal to reduce all curve financing L2 Work is gaining strength
These figures have delivered a serious management proposal to the title “All further or current L2 developments.” In Curve Finance, Token holders vote on such proposals using VECRV, the locked governance token.
This message argues that the development and maintenance of the presence of curve over 24 different L2S is a huge time with little reward.
Curve Community talks about stopping L2 Development: Source: Curve Finance
According to a comment about the proposal, these 24 L2S combined only $ 1500 daily income. That is only $ 62 per day per L2.
Curve’s Ethereum -Pools, on the other hand, generate $ 28,000 a day on a slow day. That means that Ethereum only performs when 450 L2S merged. From the point of view of sources, the decision is almost a no-brainer.
Curve Finance Revenue Data supports this step
The broader income and the disintegration of reimbursements draws this up. In the last 30 days, Curve generated $ 2.72 million in reimbursements and $ 1.67 million in income. Ethereum was the most important driver. Since the launch, Curve has collected a cumulative income of $ 171 million.
Curve Financing Costs Source: Defillama
While Curve has three major services: its core Dex, his Stablecoin CRVUSD and the Lamende loan platform, most daily costs still come from the Dex. L2 platforms such as arbitrum hardly appear in distribution cards for costs. That is a problem for long -term sustainability and stimuli for developers.
Curve costs per protocol source: Defillama
It is not only arbitrum; Other chains also bleed
Arbitrum is not the only underperformer. Curve’s TVL and trade volume on chains such as Polygon, BNB Smart Chain (BSC) and even the basis are minimal.
Volume-per-chain data show that arbitrum is lagging behind newer players such as Sonic and far behind Ethereum. Gnosis, avalanche and polygoon each contribute a small piece of total curved volume.
Ethereum Leads Source: Defillama
Cumulative cost data makes the contrast even clearer. Ethereum has generated more than $ 319 million in costs for curve since the launch.
Arbitrum? $ 4.8 million. Lephere corner? $ 11.5 million.
Curve Finance on Ethereum is not only dominant; It is the only necklace that really pulls its weight.
If the management proposal and early signs indicate strong support, curve swaps on Arbitrum can become sunset in the coming months. This does not mean total closure.
Existing liquidity pools on arbitrum and other L2s remain live. But there will be no new developments, no added incentives and probably no future growth.
Instead, Curve seems ready to double on Ethereum. Governance -members are already insisting on deeper CRVUSD adoption and closer integration within the Ethereum Ecosystem, where Curve is still a defi heavyweight.
In short, Curve financing can close its L2 experiment. Arbitrum and his colleagues have not provided any expectations. And unless something changes drastically, curve swaps on these chains can fade slowly in irrelevance, while Ethereum continues to wear the torch.
