Binance Completes Optimism Network Integration, Makes Layer 2 ETH Deposits Available

Binance has announced the completion of its Optimism Network integration and has opened deposits for $ETH on Optimism Layer 2. The crypto exchange revealed that layer 2 $ETH deposits are also available on the platform. Layer 2 (L2) is a phrase used to refer to a group of Ethereum scaling solutions. A layer 2 blockchain is an extension of Ethereum that inherits Ethereum’s security guarantees.

“Binance will open withdrawals for $ETH on the Optimism Network once there are sufficient assets in our wallet. No further announcement will be posted, “the crypto exchange posted on its official website.

A layer 2 blockchain connects with Ethereum regularly (by sending transaction bundles) to verify that both have the equivalent security and decentralization guarantees. However, all of this can be accomplished with no changes to the layer 1 protocol (Ethereum). This allows layer 1 to take care of security, data availability, and decentralization, while layer 2 takes care of scaling. Layer 2 relieves layer 1 of transactional responsibilities and returns finished proofs to layer 1.

Ethereum’s layer 2 tackles the blockchain’s scalability problems. Ethereum’s goal of scalability is to increase transaction speed and transaction throughput (higher transactions per second) without doing away with decentralization or security. The Ethereum community has stated that it will not budge under pressure to sacrifice its decentralization or security to scale.  

The Ethereum mainnet (layer 1) can only execute about 15 transactions per second before sharding and becomes clogged when there is a high demand on the network, leading to high transaction fees and pricing out a section of users.

This is where layer 2 comes into play in today’s Ethereum scaling. Ethereum’s layer 2 protocol is also bringing lower fees by combining multiple off-chain transactions into a single layer 1 transaction, making Ethereum more accessible for all.

Binance has been in the news lately after its Luna investment was reduced to peanuts. Binance had $1.6 billion worth of Luna tokens as of April after the company invested $3 million in the coin back in 2018. Binance’s investment, at Luna’s price now, is worth $3000 after the coin shed almost 99% of its value in the past week.

However, despite Binance’s big losses, CEO Changpeng Zhao has stated he still wants retail traders who lost money during Luna’s crash last week to be reimbursed before Binance is. “To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retail users first, Binance last, if ever,” Zhao tweeted on Monday. 

Just like Luna, TerrraUSD also recorded a significant price drop, while Bitcoin and Ethereum ($ETH) also continued to trade close to 18-month lows.