Binance opens Layer 2 ETH custody accounts with Arbitrum One integration

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On Friday, Binance announced the integration of the Arbitrum One core network and opened Ether (ETH) deposits on the Arbitrum One layer two.

Arbitrum is an optimistic third generation rollup protocol that runs on an off-chain Ethereum contract and has lower costs and faster transactions than the Ethereum mainnet.

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The announcement states that Binance users can now deposit any ERC-20 token from the Ethereum network with Arbitrum at reduced transaction costs. In addition, Binance also stated that in the near future it will allow ETH withdrawals on layer two of the Arbitrum One Network, making it one of the first centralized exchanges with layer 2 support.

Related: The Power of Cheap Transactions: Can Solana Outpoke Ethereum’s Growth?

Arguably the most famous blockchain network in the world, Ethereum has been hampered by network congestion and exorbitant fees, which hampered its exponential growth. Arbitrum One offers a solution to this problem by using a multi-layered Ethereum consensus protocol that enables unlimited scalability and near-instant transaction times at a fraction of the cost.

Binance’s integration of Layer 2 ETH custody accounts is a significant step forward and comes at a time when decentralized exchanges and cross-chain atom swaps are gaining popularity in the market. Binance is one of the largest cryptocurrency exchanges in the world by volume, and the Arbitium integration is good news for the Ethereum launch.

Related: Why interoperability is the key to future innovation and adoption

The introduction of the Arbitrum One Network Layer 2 did not include an announcement for ETH withdrawals, but did promise that more information would be provided when that functionality becomes available to traders. However, it has been reported that Binance is preparing to allow users to withdraw their funds directly to Arbitrum.

Binance is working to enable direct ETH withdrawals to Arbitrum, according to a tweet from Lark Davis, a New Zealand crypto investor. According to Lark, the integration will be “MASSIVE for Ethereum Adoption”. A screenshot showing the reduced transaction costs and time is attached to the message.

The integration of Layer 2 functionality is a big step in the right direction as Ethereum strives for scalability and Ethereum 2.0. It’s worth noting that the introduction of Ethereum 2.0 won’t stop Layer 2 platforms from responding to scalability. Instead, technologies like rollups or sidechains will continue to help Ethereum 2.0 scale beyond its current capacity once sharding is fully implemented.