Binance Adds Support for Layer-2 Ethereum Scaling Solution Optimism

By Sujith Somraaj

The world's largest cryptocurrency exchange Binance today announced that it has integrated the layer-2 scaling solution Optimism.

However, the exchange only supports deposits at this time; withdrawals aren't available until the exchange achieves optimal liquidity, explained the exchange.

"Binance will open withdrawals for ETH on Optimism Network once there are sufficient assets in our wallet," read the announcement.

Optimism is a layer-2 scaling solution for Ethereum aimed at helping reduce costs and improve transaction speeds, an Achilles heel for many blockchain networks. 

Insofar as Ethereum has become the primary hub for various DeFi and NFT activities, costs on the network have routinely skyrocketed amid market volatility, a popular NFT drop, or due to the emergence of a new yield farm.

Average gas fees on Ethereum from January 2, 2020, to present. Source: Etherscan.

Scaling solutions like Polygon, Arbitrum, and Optimism emerged to solve precisely these issues. 

The costs associated with a blockchain transaction are basically the cost of processing and storing information. These solutions essentially move activity away from the costly mainnet. Once a series of transactions or crypto operations are concluded, the results of these activities (who owns which coins and how much, for example) are then sent and secured on the mainnet. 

These ease congestion by reducing the amount of information a base layer blockchain needs to validate and secure.

The gas cost of Optimism, for example, is currently 98 times lower than that of Ethereum, according to data from Dune Analytics.  

Average gas savings per transaction on Optimism compared to Ethereum. Source: Dune Analytics.

Optimistic growth for Ethereum scaler

Optimism is gaining popularity lately, with a total value locked (TVL) standing at $304.1 million and nearly 40 different DeFi projects using the technology, according to data from Defi Llama.

Besides Binance, other cryptocurrency exchanges have also taken steps toward integrating layer-2 networks. 

FTX, the fast-growing exchange led by Sam Bankman-Fried, has integrated Arbitrum, another Ethereum scaling solution. KuCoin also added support for Optimism in April 2022.

Recommended News