Binance, the world’s largest cryptocurrency exchange by volume, announced on Friday that it had integrated the layer-2 scaling solution Optimism because Binance is optimistic about the future of Ethereum’s Layer 2.
The exchange explained that, at this time, deposits are the only thing supported; withdrawals will not be available until the exchange achieves optimal liquidity.
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The announcement reads;
Binance will open withdrawals for ETH on Optimism Network once there are sufficient assets in our wallet.
This Optimism is a layer-2 scaling solution for Ethereum, which will help to reduce costs and enhance transaction speeds, which is an Achilles heel for many blockchain networks.
The exchange will allow customers to deposit ETH straight to Optimism without depositing on the Ethereum mainnet and using a bridge to emigrate onto Layer 2. This means they’ll be able to move their assets and access the Ethereum network at a lower cost.
The Ethereum network has become famous for activities like DeFi and NFTs. However, the network is often bustling, which can cause costs to increase. This happens during market volatility, when someone drops an NFT, or when a new yield farm appears. Scaling solutions like Polygon, Arbitrum, and Optimism emerged to solve these issues.
The costs related to a blockchain transaction are the cost of processing and storing information. These solutions (Polygon, Arbitrum, and Optimism) move the activity away from the costly mainnet.
Once a series of transactions or crypto operations end, the results of these activities are then sent and saved on the mainnet, like who owns which coins and how much.
However, Optimism leverages Optimistic Rollups, a technology that reduces traffic on Ethereum, processes transactions on a new network, and then sends them to the Ethereum mainnet as call data.
Ethereum Scaler’s Optimistic Growth
Nowadays, Optimism and Arbitrum are Ethereum’s two leading Optimistic Rollup solutions, already hosting the Aave and other top DeFi projects. According to data from Dune Analytics, the gas cost of Optimism is 98 times lower than that of Ethereum.
As per the data from Defi Llama, Optimism has been gaining popularity recently, with a total value locked (TVL) standing at $290.96 million and almost 40 different DeFi projects that are using the technology.
Optimism was in the spotlight by announcing the launch of the OP token last month, and rumors imply that the Arbitrum will also come with its token in the future.
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Besides Optimistic Rollups, ZK-Rollups (Zero-Knowledge Rollups) is the other promising Layer 2 technology on which Ethereum is betting to become user-friendly.
The Projects that are working in the ZK-Rollups domain contain zkSync and StarkWare. ZK-Rollups enhance existing Layer 2 networks by offering consistency and better security. In addition, this solution will offer a way to bundle many transactions together and commit them to Ethereum’s Layer 1 as a single proof.
Featured image from Pixabay, and chart from Tradingview.com
Source: https://bitcoinist.com/ethereum-layer-2-scaling-solution-on-binance/