Popular cryptocurrency exchange Binance, has reportedly integrated the Arbitrum network for ETH deposits. Binance announced that users can deposit ERC-20 tokens from the Ethereum blockchain using Arbitrum at cheaper rates.
Arbitrum is a layer-two optimistic rollup that runs on the Ethereum contracts and facilitates transactions at reasonable costs on the network. With Binance integrating the optimistic rollup, users will not only be able to deposit, but they can also withdraw Ether. However, Binance states that withdrawal will happen in no distant future. This news makes the exchange the first to support a layer-two scaling solution.
Ethereum Still Face Congestion Issues
Ethereum is the most deployable blockchain network, but its growth has been impacted negatively of late by congestion and high fees. This has reduced the amount of revenue made by developers who deploy their DApps on the network. Network congestion has also affected scalability and speed of transaction.
Arbitrum One was developed to ease these congestion problems and exorbitant fees by utilizing a multilayered protocol that allows for instantaneous transactions at a lower cost. Integrating Arbitrum One to facilitate layer2 deposits is a positive step in the right direction for Binance, especially at a period where decentralized exchanges are gaining momentum. At the moment, Binance is the largest crypto exchange by volume, despite having issues with regulatory authorities across several countries.
ETH Withdrawals Will Soon Be Allowed on the Network
A lot of users were reportedly in dilemma about ETH withdrawals, prompting them to question Binance if such an option was possible on the layer2 network. Binance clarified that the integration of Arbitrum was for ERC-20 tokens deposits for now, but promised that more information would be revealed when the option is made available. It was later reported that Binance is planning to enable layer2 withdrawals, meaning that Binance users can withdraw funds directly to the network.
A crypto investor from New Zealand, who bears the name Lark Davis made the revelation. According to him, the news about the integration will facilitate massive ETH adoption. Davis later shared a screenshot of the decrease in costs and time while initiating transactions.
Ethereum 2.0 is on its way, and the news of the integration is a massive boost ahead of the launch. Ethereum 2.0 is all about maximizing scalability, and the network kickstarted the upgrade by releasing v1.0 in early November for mainnet deposits. According to the developers, it must be noted that the 2.0 launch won’t completely solve the issue of scalability if Layer2 protocols don’t work together with rollups and side chains. These technologies can help speed up scalability once sharding is fully implemented.