Arbitrum has covered a lot of ground in the few months of its existence. As the second biggest Layer 2 solution, Arbitrum has managed to amass a huge network of assets and users onto its Arbitrum ONE mainnet.
However, it had yet to be adopted by the general public, which is necessary to address the Layer 1 issues. Binance’s announcement on November 19 may just have done so.
Binance and Arbitrum
Binance recently announced on twitter that it has successfully completed the Arbitrum ONE mainnet integration. This enabled users to deposit ETH on Arbitrum One Layer 2. For now, this announcement only pertains to deposit, withdrawals will be enabled on a later date.
Now, while this is great news for Ethereum adoption, it’s a much bigger opportunity for Arbitrum to further expand aCurrently, the Arbitrum to Ethereum bridge is dominated by Wrapped ETH (WETH).
With almost 50% domination in TVL and on the token bridge, it has left only 50% of the space for other ERC-20 tokens. But, compared to two months ago, the distribution of assets has risen significantly.
In August, there was a significant dominance of LINK which contributed 88% of Total Locked-In Value (TVL). However, since early September, USDC, USDC and WETH have taken over.
With 50% TVL under WETH’s control, the remaining 50% is under the dominance of DPX, USDC, USDT, SPELL, WBTC, and RDPX as they cumulatively hold 45% of the TVL and token bridge dominance currently.
Nevertheless…
Arbitrum still has a long way to go and many more ERC-20 tokens to add to the network. Oddly enough, this month hasn’t been great for the Layer 2 solution already.
Its overall TVL growth has also barely risen over the month and at the same time fallen by $700 million in the last week. And to add to that ERC 20 withdrawals and deposits have come down to just 24 and 52 respectively.
Also, another issue associated with Arbitrum is the issue of gas charges. Even though transactions are much cheaper than Ethereum Layer 1 at $ 8.5, Arbitrum still charges $ 3.5 per transaction, according to data at press time.
So, Arbitrum might need to look into solving this problem as soon as possible.
So, perhaps this announcement could be the necessary boost as Binance will become proof of the growing adoption of Arbitrum and, in turn, attract more investors.
