A new era in Ethereum scalability has arrived. OKEx – the leading crypto-exchange announced on May 3 that it was integrating the Arbitrum L2 solution for allowing direct deposits/withdrawals of ETH and Ethereum assets to Layer 2, through the platform. This is the first centralized exchange to announce such measures. It’s significant because Ethereum per transaction fees has risen and retail users dealing with modest sums, need to be on-boarded, without touching the mainnet first.
The development is likely to bring further users to Ethereum since high fees ensure that a certain percentage of users opt-out from usage. Arbitrum L2 hasn’t launched on mainnet yet and is currently live on Kovan testnet. OKEx intends to complete the integration as soon as the production-ready version goes on Ethereum mainnet.
This begins a new era for Ethereum scalability as more and more exchanges are likely to integrate such solutions, boosting user acquisition and retention. Ethereum Layer 2 solutions or off-chain processing solutions have been around for a while, however, it took a high amount of fees to onboard them through mainnet. An issue that is resolved by relying on direct deposits/withdrawals through exchanges.
About Ethereum Scalability Layer 2 Solutions
The Layer 2 scaling solutions are decentralized protocols that increase the processing capacity of a blockchain (hence scaling) and as a result, relieve congestion on the network.
They work by delegating the network processing “off-chain” to their own chain, processing it there, before settling the final balances on the base layer mainnet.