On Friday, Binance, the world’s largest cryptocurrency exchange by trading volume, announced that it had integrated the Layer 2 scaling solution “Optimism” for Ethereum. In a move to facilitate seamless interactions between the exchange and one of the most significant scaling solutions in the history of decentralized finance.
However, the exchange’s Integration of Optimism currently supports only deposits; withdrawals will not be available until the exchange has reached optimal liquidity that will allow transactions made using this new feature to be executed.
“Binance will open withdrawals for ETH on Optimism Network once there are sufficient assets in our wallet,” stated the announcement.
Optimism is an Ethereum Layer 2 scaling solution designed to help reduce the gas fees and improve transaction speeds, which have been a source of contention for many blockchain networks.
Presently, the Ethereum network is experiencing scalability issues, with network congestion being the norm. The move from its proof-of-work system to proof-of-stake is expected to improve its scalability significantly.
Also, Ethereum has remained the primary hub for DeFi and NFT projects despite its slow network and high transaction gas fees. Costs on the network routinely increase with heightened market volatility, the emergence of new farm yields, and popular NFT drop.
One example is the Bored Ape Yacht Club (BAYC) land sale on May 1, which caused gas fees to significantly increase and broke Ethereum as a high transaction rate congested the network.
The Layer 2 scaling solution is designed to move activities such as transaction processing costs and information storage from the Ethereum mainnet. After a series of completed crypto operations or transactions, the results of those activities are later sent and then secured on the manniet.
Aside from Optimism, there are other scaling solutions on the Ethereum network, which include Polygon and Arbitrum. Both have emerged as preferred options for developers looking to avoid the high cost of building on the Ethereum mainnet.
Additionally, Optimism has been growing in popularity lately, with a total value locked of $304.1 million and nearly 40 different DeFi projects utilizing the technology, according to Defi Llama.
