Binance, the largest cryptocurrency exchange globally by trading volumes, has announced the integration of Optimism, a layer two scaling solution. The move will bring seamless interactions between the centralized exchange and one of the largest scaling solutions in decentralized finance.
Binance unveils support for Optimism
Binance’s integration of Optimism will initially only support deposits. Withdrawals will not be available until the exchange achieves optimal liquidity that will allow it to fulfil transactions made through this new feature.
The announcement from the exchange said that Binance would launch withdrawals for Ether on the Optimism network after it gathers enough assets in its wallet. Optimism is a layer two scaling solution on the Ethereum network.
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Optimism is one of the many scalable solutions on the Ethereum network. The platform seeks to lower user costs and increase transaction throughput. The Ethereum network is currently facing issues with scalability where congestions on the network have been the order of the day, and the scalability is expected to be generated with the transition of the network to a proof-of-stake network.
Despite the Ethereum mainnet being slow and charging high transaction costs, it has remained the most preferable ecosystem for DeFi and NFT projects. Costs usually rise when there is increased market volatility, an NFT drop or the creation of a new yield farm.
Optimism is not the only scaling solution on the Ethereum network. Other solutions such as Polygon and Arbitrum are still live on the network, and they have become preferable choices for developers that want to escape the costs of building on the Ethereum mainnet.
Developers have to pay costs for building their projects on a network. The transaction costs are fees charged for processing and storing information within a network. With the layer two solutions on the Ethereum network, activity is moved from the Ethereum mainnet, and when transactions and concluded, they are later sent and secured in the mainnet.
These layer two networks ease congestions on the main Ethereum network. They reduce the amount of information that a blockchain will validate and secure. On Optimism, the gas costs are around 98 times lower than the main Ethereum network.
Optimism’s growing popularity
The Optimism network has become quite popular lately. The total value locked within the network currency stands at $304.1 million, and around 40 DeFi projects use the layer two network, according to data from DeFiLlama.
Because of its growing popularity, Optimism is being integrated on leading platforms in the sector. Binance is joining other exchanges such as FTX and KuCoin that have already integrated Optimism. FTX has already integrated Arbitrum, another scaling solution on the Ethereum network. KuCoin integrated Optimism in April this year.
Cryptoassets are a highly volatile unregulated investment product.