Binance opens Layer 2 ETH custody accounts with Arbitrum One integration

Today Binance announced the integration of the Arbitrum 1 core network and the opening of Ether (ETH) custody accounts on Arbitrum A person Layer 2.

Arbitrum is an optimistic third generation rollup protocol that runs on an off-chain Ethereum contract and reduces costs and increases transaction speed compared to the Ethereum mainnet.

The announcement notes that Binance users can now use Arbitrum to send any ERC-20 token off the Ethereum network with reduced transaction costs.

On top of that, Binance also announced that they will allow ETH withdrawals on Arbitrum A Person Network Layer 2 in the near future, making it one of the first centralized exchanges with Layer 2 support.

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Ethereum, the world’s second largest cryptocurrency, has been plagued by network congestion and exorbitant fees, which has hampered its exponential growth. Arbitrum Just One provides a solution to this problem with a layered Ethereum consensus protocol that enables unlimited scalability and near-instant transaction times at a fraction of the cost.

The integration of Binance’s ETH-L2 custody account is an important step forward at a time when decentralized exchanges and cross-chain atomic swaps are gaining popularity in the market. Binance is one of the largest cryptocurrency exchanges in the world by volume, and the Arbitium integration is good news for the Ethereum launch.

Related: Why Interoperability Is Key To Innovation And Future Adoption

The introduction of Arbitrum 1 Network Layer 2 does not include an announcement of ETH deductions, but does promise that more information will be provided as the functionality becomes available to traders. However, it is reported that Binance is preparing to allow users to withdraw funds directly to Arbitrum.

Binance is working to enable direct ETH withdrawals to Arbitrum, according to a tweet from Lark Davis, a New Zealand crypto investor. According to Lark, the integration will be “enormous for the introduction of Ethereum”. Screenshot showing the reduced transaction costs and the time included in the message.

The integration of L2 functionality is a big step in the right direction as Ethereum works towards scalability and Ethereum 2. Instead, technologies like roll-up or side-chain will continue to support Ethereum 2 and scale beyond its current capacity once sharding is fully implemented.