- Binance confirmed that it was in the process of enabling Bitcoin Lightning Network for deposits and withdrawals.
- The exchange’s token BNB pumped 3.89% in the 24-hour period.
Binance [BNB]the world’s largest cryptocurrency exchange, took to Twitter to announce a significant improvement that could affect how the trading platform handles massive volumes of transactions in the future.
Read Binance Coin [BNB] Price Forecast 2023-24
The crypto giant confirmed that it was working to enable Bitcoin [BTC] Lightning Network for deposits and withdrawals, in response to users noticing the new lightning nodes in recent days. However, Binance added that full integration would take some time.
If implemented successfully, Binance will join other big names such as Kraken and OKX [OKB] who already have the technology installed on their respective platforms.
#Binance working on the integration of the #Bitcoin Lightning Network for deposits and withdrawals.
Some eagle-eyed users have recently seen our new lightning nodes. Yes, that’s us!
However, there is still more technical work to be done. We’ll update once Lightning is fully integrated. https://t.co/N0oN8561sN
— Binance (@binance) June 20, 2023
Meaning of the lightning network
The unprecedented congestion on the Bitcoin blockchain in May prompted Binance to implement the Lightning network. Interestingly, the huge backlog of transactions forced Binance to pause withdrawals twice in the space of 48 hours.
Over time, as Bitcoin adoption has grown, traffic on the network has also skyrocketed. Given the design limitations of the current network, scaling has become an issue. In addition, the chain also consistently struggles with transaction throughput.
Lightning Network is a layer-2 solution (L2) on top of the Bitcoin blockchain. It is designed to solve basic network failures by introducing off-chain transactions.
Simply put, these transactions use direct channels between users. And multiple transactions can be handled without waiting for the blockchain to confirm them. Once these payment channels are closed, the transactions land on the mainnet for confirmation.
Tough times for Binance
Binance’s move comes at a time when it is increasingly facing regulatory animosity not only in the US, but also in other major markets. After being sued by the US SEC earlier this month about financial irregularities, the stock market had problems in European countries.
The negativity has also affected the stock market, especially its US branch, Binance.US. According to CoinGecko, daily spot trading volume on the exchange has dropped 80% since the SEC lawsuit.
Source: CoinGecko
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At the time of writing, the exchange’s token BNB pumped 3.89% in the 24-hour period to $251.25, possibly in response to its parent’s embrace of the Lightning Network.
Additionally, the token has seen some recovery over the past week, driven by an increase in buying pressure, according to Santiment.
