On Monday, excessive cryptocurrency prices were accompanied by Binance’s new restrictions on Ethereum and ERC-20 tokens.
Ethereum network congestion refers to the culprit of temporary pauses
Via official Binance Twitter accountAs one of the world’s largest cryptocurrency exchanges, the company announced that due to network congestion, it has “temporarily suspended the withdrawal of Ethereum and Ethereum-based tokens” and emphasized that user funds are SAFU (User Safe Asset Fund).
The assured funds are #SAFU Sorry for any inconveniences caused.
-Binance (@binance) February 22, 2021
Although Binance announced within 37 minutes of its first tweet that it had withdrawn its previous decision and resumed services, traders quickly accepted the criticism. The latest move is a rapid escalation in the context of the soaring cost and backlog of Ethereum natural gas. 151,000 pending transactions.Binance CEO Changpeng Zhao The pressure on the system was confirmed, and it was noted that the gas injection exceeded “+1200” during the recent congestion period.
ETH is now super crowded, with only more than 1,200 gasoline. @Binance Withdrawal has been suspended.
There is a conspiracy theory that Binance deliberately increased ETH gas fees. 😂 Let’s take a look at it down. pic.twitter.com/tNK9b3b9OK
-CZ🔶Binance (@cz_binance) February 22, 2021
After being accused of persistently high gasoline costs, Binance has become an important target in the crypto community. Some people claim that congestion is a joint effort of Binance to attract more users to use Binance Smart Chain.However, given that Binance pays huge transaction volumes and gas fees to the Ethereum network every week, this statement is difficult to prove
Binance outage highlights the need for expansion
However, along with other recent events such as AWS issues that occurred last week, This latest service interruption raises the question of whether the centralized exchange can handle the latest investor traffic. In addition, the launch of Ethereum 2.0 also exposed similar expansion issues, and whether the blocked blockchain can keep up with the pace of adoption.
For some market participants, the answer lies in liquidity aggregators. Although service interruptions have dotted the cryptocurrency space for many years and have become commonplace during periods of severe volatility, aggregators that pool liquidity from central (CEX) and decentralized exchanges (DEX) have put together a patchwork s solution. Nevertheless, questions about its hosting security and blockchain interoperability still exist.
Products such as Orion Protocol solve many challenges by mixing liquidity from CEX, DEX and now Automated Market Makers (AMM). The aggregator is trying to help spread the pressure and reverse the load issues felt by the exchange during peak periods, while avoiding custody issues.
However, for traders who have recently concentrated on trading, with the latest Binance interruption highlighted, load balancing issues and volatility are still the scourge of the ecosystem.
Do you think exit suspension will become the norm, or find a solution to network congestion? Let us know in the comments section below.
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