By Alicia Maher
The world’s largest crypto exchange, Binance, has taken a step further to address its scalability problem on its platform. With the latest completion of the Optimism Network integration, Binance has now added the deposit option for Ethereum on Optimism Layer 2.
The newly completed feature will allow users to deposit into the ETH Layer 2 protocol.
Scalability is Crucial to Binance
According to the announcement from Binance, the exchange will enable withdrawals for Ethereum on the Optimism protocol once Binance has enough assets in its wallets.
However, the exchange added that no further statement would be made.
The rapid emergence of decentralized finance (DeFi) and the rising number of transactions on Ethereum’s network have led to rising transaction costs.
This is caused by numerous industry factors, like the market’s volatility and the development of new yield farms for crypto mining.
Additionally, the rise in the adoption of digital assets and blockchain-based products and services like Optimism and Polygon has made solutions to scalability possible.
These known solutions have led to a reduction in the cost of processing blockchain transactions. Moreover, the processing and storing costs formed the bulk of the blockchain transaction fees.
More importantly, these solutions lessen the dependence on the costly mainnet, which drives costs up.
After completing several transactions, the outcomes of these activities are sent to the mainnet for secure storage. Bulk data processing is a contributing factor to transaction costs.
Currently, Arbitrum is leading the way toward dominating the Layer 2 space with a market value of up to $2.96 billion. On the other hand, the direct rival, Optimism, has a market worth of $500 million and is continually gaining attention after some upgrades to its system.
Rumors making the rounds reveal that Arbitrum is considering launching its native token like Optimism in the future.
Ethereum Merge Upcoming
The expansion of Layer 2 space has been impressive. Ethereum’s transition has been going on steadily in the background. Later in the year, the blockchain platform will complete its much-awaited merge with the Proof-of-Stake (PoS) protocol, which will give it a competitive edge over other blockchain networks. The blockchain ecosystem is expanding, and competition is on the rise.
Work on the new development has already begun and will be launched on a testnet on June 8, while the complete update will be ready for the public in August.
An Ethereum developer, Tim Beiko, revealed on April 11 that the development team has put on hold the proposed merge due to some technical issues. Beiko noted that the new project would not be launched on the stated date. He added that the delay is necessary to prevent further setbacks.
Moreover, the Ethereum developer added that the team was working on new updates to ensure that the project would not be stuck in another difficult situation.
Should the merge be successful, it would signal a major milestone achieved by the Ethereum network and pave the way for more upgrades in 2023.