The Binance integration of Arbitrum One provides a veritable alternative for depositing ERC-20 tokens, making the process cheaper for users.
Binance recently announced that it has integrated with the Arbitrum One core network and opened layer-2 ETH deposits on the Arbitrum One Layer 2. The development means that Binance users can now swiftly deposit any ERC-20 tokens from the Ethereum blockchain using Arbitrum. In addition, these users will be able to do this at a relatively affordable transaction price. Furthermore, the prominent crypto exchange also suggested plans to facilitate Ether (ETH) withdrawals on the Arbitrum One Network Layer 2 soon.
Although Binance did not elaborate on this, it promised to provide more information when the feature becomes available. Should Binance choose to go ahead with this, it will become one of the first centralized crypto exchanges with layer-2 support.
Binance’s integration of layer-2 ETH deposits is significant. This is because several cross-atomic swaps and decentralized exchanges now enjoy higher market popularity.
Arbitrum One, developed by Offchain Labs, is the beta mainnet of a rollup, scaling solution for the Ethereum network. Its new initiative with Binance is a welcome relief to users who had to bridge to Arbitrum through a different network, which proved costly. Binance currently has one of the world’s largest digital currencies’ trading volumes, and the Arbitrum integration portends well for Ethereum adoption. It frees up the protocol more to accommodate other tasks. As one decentralized finance trader explained:
“This is fairly big news because it will enable more people to use Arbitrum without having to touch Ethereum.”
Binance Initiative with Arbitrum One Is a Step in the Right Direction
In recent times, the growth of the Ethereum network has been stymied by several issues. Atop this list there are network congestion and highly-priced transaction costs. However, Binance onboarding Arbitrum One helps to substantially improve the network’s outlook. This is because Arbitrum One uses a multilayered Ethereum consensus protocol that can accommodate unlimited scalability. In addition, Arbitrum One also executes this quickly, and several times cheaper than the current Ethereum transaction cost.
Lark Davis, a crypto investor from New Zealand tweeted that Binance is working on permitting users to make direct ETH withdrawals to Arbitrum. In Lark’s own words, such an integration will be “massive for Ethereum adoption”. Added to Lark’s tweet is a screenshot displaying the reduced transaction fees as well as time.
Ethereum’s integration of layer-2 functionality comes amid the network’s progressive transition towards scalability and Ethereum 2.0. This journey has been long and challenging, prompting the Ethereum network to ‘shift the goalpost’ on more than one occasion. However, it remains firmly on course as technologies such as rollups or side chains continue to aid the Ethereum 2.0 scale.
Finally, it is important to note that the launch of Ethereum 2.0 will not prevent the layer-2 platform from working to solve for scalability at the moment.
As of press time, ETH is currently trading at $4,123.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.