Arbitrum One’s core network has now been fully integrated by Binance, the cryptocurrency firm announced earlier today. This paved the way for Ether withdrawals on Arbitrum One Layer 2, which is a scaling solution for the Ethereum network.
Arbitrum One is the beta backbone of an optimistic layer 2 stacking protocol that enables faster and cheaper off-chain Ethereum transactions compared to the Ethereum backbone.
Binance users can now deposit all ERC-20 tokens in the Ethereum network, with the Arbitrum side chain at a lower cost, and all users have been assigned ether deposit accounts, according to the announcement. The exchange further noted that ETH withdrawals would also be enabled for Arbitrum One Network Layer 2 at a later date, which has yet to be disclosed.
Several Layer 2 solutions have emerged in recent times as a result of severe congestion issues faced by the Ethereum network. They are used by a number of DeFi protocols to allow users to perform fast and economical transactions. However, Binance is one of the first centralized exchanges to adopt the solution.
Popular crypto analyst Lark Davis expressed his excitement about it on Twitter, predicting that the move could accelerate the adoption of Ethereum, which is often hampered by network issues. He also attached a screenshot showing transaction fees and reduced costs in his tweet.
– Lark Davis (@TheCryptoLark) November 19, 2021
Layer 2 solutions solve Ethereum congestion issues by Arbitrum One using a multi-layered Ethereum consensus protocol that only records transactions on the mainnet of the network. Arbitrum is the second largest Layer 2 solution after Polygon on the Ethereum network and its growth in the first few months since its launch on the mainnet has been exceptional.
However, the initial momentum may have abated, noting a slow growth rate for the cross-chain as its Total Locked-In Value (TVL) surpassed $ 2 billion. Nonetheless, with increased reliance on Layer 2 solutions caused by increased DeFi and NFT activity on Ethereum, Arbitrum could have huge growth potential just like its rival Polygon. It was also recently integrated by another crypto exchange, Crypto.com.