Binance Announces L2 Network Optimism Support for Ethereum

The largest crypto exchange by trading volume, Binance, has announced that it is adding support for Optimism, a scaling solution designed for the Ethereum blockchain.

According to the announcement, the CZ-led exchange would only allow ETH deposits via the scaling network for now. Withdrawals, however, would be opened at a later date when the crypto firm has enough liquidity.

The announcement reads:

Binance has completed the Optimism Network integration and opened deposits for ETH on Optimism Layer 2… Binance will open withdrawals for ETH on Optimism Network once there are sufficient assets in our wallet.

Binance is not the first crypto exchange to integrate an Ethereum layer 2 scaling solution into its platform. Other leading crypto exchange platforms like KuCoin and FTX have done so previously.  KuCoin added support for Optimism back in April, while FTX has also integrated Arbitrum into its platform.

Layer 2 Scaling Solutions Like Optimism Helps Ethereum to Scale-Binance

Optimism, alongside other layer 2 scaling solutions, has become quite popular on the Ethereum blockchain. The layer 2 networks are mostly designed to help the network circumvent some of the issues it faces in speed and cost of transactions.

With Ethereum being the hub for NFT and DeFi projects, these scaling solutions like Optimism, Arbitrum, and Polygon play a role in helping to maintain ETH’s dominance against its rivals.

However, according to data from Dune Analytics, the cost of transacting directly on Ethereum is 98 times higher than it is to trade on L2s like Optimism. This shows why these L2s have become increasingly popular amongst the crypto community.

Apart from that, the total value of assets locked in the L2 is believed to be worth over $300 million, according to data from DeFiLlama. Also, several DeFi projects like Uniswap, Synthetix, Lyra, and others have built their services on top too.

Notably, Optimism also recently announced its plans to introduce a governance token to give its users more power and a unique governance model.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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