Automated token exchanger LuaSwap is cutting costs by employing a second-layer alternative to transacting on the heavily crowded Ethereum mainnet.

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LuaSwap using TomoChain for backend transactions

The number of projects adopting layer-two solutions for Ethereum’s scaling woes is increasing, with LuaSwap rolling out a new, TomoChain-based exchange engine yesterday.

The change will enable the Uniswap inspired exchange to perform token swaps with greater speed and efficiency than many rival Automated Market Maker ERC-20 exchanges.

— LuaSwap (@LuaSwap) January 27, 2021

While LuaSwap remains an Ethereum-based application, transactions related to conversion processes are now performed using the TomoChain blockchain, instead of Ethereum.

TomoChain employs block lengths of two seconds, and boasts transaction fees that are considerably cheaper than Ethereum's mainnet. As such, swaps that might normally cost $10 or $20 on Ethereum can be executed for just a few cents on TomoChain.

LuaSwap is now live on the $TOMO blockchain!

LuaSwap makes AMM trading possible for both $ETH and TomoChain based tokens.

The big difference? Near-zero gas fees. pic.twitter.com/FetZYqInFL

— Upblock (@upblock_io) January 27, 2021

A newly launched TomoBridge makes it possible to transfer any two assets between the Ethereum and TomoChain blockchains by wrapping tokens. The process leverages a recent upgrade to TomoChain, which allows any ERC-20 token to be wrapped and imported to TomoChain as a TRC-21 token.

The Zorro Upgrade, @TomoChainANN's latest mainnet version will pay the way for upcoming #LuaSwap implementation on TomoChain, with more speedy transactions & cost-effective gas fees
LuaSwap lovers, are y ready to switch to #TomoChain?$TOMO https://t.co/hbYW6ZMp3b

— LuaSwap (@LuaSwap) January 13, 2021

At present, transaction fees on LuaSwap are often higher than gas fees on Uniswap due to a lack of liquidity for tokens on the TomoChain side of the bridge. However, said problem is expected to be resolved when a sufficient number of liquidity providers have created LuaSwap pools on TomoChain.

TomoChain is just one of a number of layer-two solutions, including Matic and Optimism that aim to help to resolve Ethereum’s scaling issues.

On Jan. 19, TomoChain announced a partnership with Ramp DeFi to provide unique trading opportunities made possible by recent developments in blockchain interoperability.

In Nov. 2020, TomoChain chief business development officer Kyn Chaturvedi told Cointelegraph he believes crypto traders are on a one-way march from centralized to decentralized exchanges, noting that the “trustless, anonymous, easy access nature that comes with DEXs/DeFi” cannot be beaten by traditional exchanges.