As the long-awaited Ethereum (ETH) merge continues to be pushed back, second-layer solutions continue to gain traction. The first cryptocurrency exchange platform, Binance, has announced that it is now compatible with Optimism, a layer 2 Optimistic Rollup.
Binance integrates Optimism
The leading cryptocurrency exchange platform continues to expand its offering. Already compatible with major networks such as Ethereum (ETH), Solana (SOL) or Avalanche (AVAX), Binance is also opening up to layer 2 solutions and announces support for Optimism.
For the moment, Binance only supports Ether deposits from this network. Withdrawals will be made available once the exchange has accumulated sufficient liquidity, as explained in the official release:
“Binance will open ETH withdrawals on Optimism Network once there are sufficient assets in our portfolio. “
In a few words, Optimism is a network running in parallel to Ethereum and aiming to relieve the network. With the latter often singled out for congestion and high fees, these second layer solutions have been a logical success.
Layer 2s are on the rise
With the explosion of decentralised finance (DeFi) and non-fungible tokens (NFTs), Ethereum has become a victim of its own success. With each new collection of NFTs, or simply in times of high volatility, transaction fees could reach exorbitant levels.
Figure 1: Evolution of gas prices on Ethereum since 2016
Ethereum’s second-layer solutions, such as Polygon (MATIC) or Optimism, have been developed to address these issues. Indeed, they deport and aggregate part of the transaction data on their network and thus lighten the main blockchain.
Currently, according to L2Fees.info, Optimism’s transaction fees are almost 20 times lower than on Ethereum. While an exchange of tokens currently costs $3.3 on the mainnet, it would only cost 17 cents on Optimism.
In recent weeks, Optimism has been gaining momentum. Total Value Locked (TVL), or the amount of cash locked into protocols, has risen from around 160,000 ETH in March to almost 240,000 ETH today.
Figure 2: Total Value Locked (TVL) on Optimism
According to DefiLlama data, Optimism ranks 18th among blockchains with the most value locked into its DeFi protocols.
