Arbitrum One core network has now been fully integrated by Binance, the cryptocurrency firm announced earlier today. This has 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 from the Ethereum network, with the Arbitrum side chain at lower costs, and all users have been assigned ether deposit accounts, according to the announcement. The exchange further noted that ETH withdrawals will also be enabled Arbitrum One Network Layer 2 on a forthcoming date, which is yet undisclosed.
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 the same on Twitter, predicting that this move could accelerate Ethereum adoption which is often hampered by network issues. He also attached a screenshot showing lowered transaction fees and cost in his tweet.
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 mellowed, noting a slow growth rate for the crosschain since its total value locked (TVL) crossed $2 billion. Nonetheless, with an increased reliance on Layer 2 solutions caused by the rise in DeFi and NFT activities on Ethereum, Arbitrum could have a huge growth potential much like its rival Polygon. It was recently also integrated by another crypto exchange, Crypto.com.
