About Layer 2 Platforms
Optimism, Arbitrum, zkSync, and Starware are the four current market-leading Layer 2 scaling solutions. Optimism and Arbitrum use Optimistic Rollup technology, while zkSync and Starkware use Zero Knowledge technology.
Both of these are targeted to lower gas fees and faster the execution of new transactions, resulting in a more pleasant user experience while maintaining the Ethereum original chain's security.
The Optimistic and ZK Rollup platforms can be thought of as a particular Layer 1 ecosystem, with unique capabilities and investment prospects. As a result, capital must be transferred back and forth across systems. This gives users access to new platforms and protocols through which they can engage and make profit.
Consider the following example:
- Send DAI from Ethereum to Arbitrum and deposit it into lending protocols to make money.
- To borrow stablecoins, send ETH from Ethereum to Optimism as collateral in debt protocols.
According to on-chain data, users regularly deposit ETH or DAI to Optimism, Arbitrum, zkSync, and Starkware. These behaviors can be explained by three factors:
- Currently, fees on four platforms (Optimism, Arbitrum, zkSync, and Starkware) are calculated in ETH, and users must have ETH to use these protocols.
- Protocols have a high level of adoption for both ETH and Stablecoin.
- Users have more control over their investments with stablecoins because they are not affected by market volatility.
Transfer ETH to Layer 2 platforms
In fact, each platform provides a variety of methods for transferring ETH between them. You can select the suitable platforms based on your specific requirements:
Optimism-compatible platforms: http://www.optimism.io/apps/bridges
Arbitrum-compatible platforms: http://portal.arbitrum.one/
zkSync-compatible platforms: https://ecosystem.zksync.io/
Starkware-compatible platforms: https://starkware.co/
Users can use the above bridges to transfer their ETH to other platforms.
Transfer Stablecoin to Layer 2 platforms
Similarly, you can use some of the bridges mentioned above to find a platform that meets your specific requirements.
Step 1: Transfer ETH to Layer 2 by Coin98 Wallet
First, you should download the Coin98 Super App. Here is a tutorial on how to download and create a wallet on Coin98 Super App.
Coin98 Wallet currently supports bridging ETH between:
- Ethereum <> Optimism.
- Ethereum <> Arbitrum.
In this part, I’ll go into details about how to transfer ETH from Ethereum to Optimism.
Step 1: Click
Swap in the main interface, then click
SpaceGate to start transferring.
Step 2: Select the
From chain and the
Step 3: Enter the trading amount, click “Convert" then click “Done" to complete the transaction.
- Before clicking to confirm the transaction, double-check the details, including the transaction fee, the amount of ETH obtained after the conversion, and adjust the gas fee appropriately (or leave it as is).
- The conversion process is quick; you'll just have to wait a few minutes for the transaction to finish.
- The transaction cost will be charged in ETH and will be determined by the current Ethereum's network situation. To save money, you should switch at low-cost hours.
You can use the same procedure as mentioned above to convert assets from Layer 2 to Layer 1. However, because of Layer2's distinct functioning mechanism, such as Optimism, it takes at least 7 days to receive assets to the wallet. After that, you go to the transaction history and select Claim to receive the token.
Step 2: Transfer Stablecoins to Layer 2 by cross-chain bridges
As those platforms have rapidly developed recently, it's easy for users to select a cross-chain bridge to transfer tokens. Some of the prominent bridges can be listed below:
Stargate: Optimism, Arbitrum.
Orbiter: zkSync, Arbitrum, Optimism, StarkNet
Multichain: Arbitrum, Optimism
Synapse Bridge: Optimism, Arbitrum.
In this part, I'll show you how to deposit and withdraw Stablecoins to Optimism/ Arbitrum via Stargate Finance.
- Step 1: Go to the Stargate Finance’s website, click
Connect your wallet.
- Step 2: Select the
From chainand the
- Step 3: Enter the trading amount, click “Approve Token” then click “Confirm transfer" to complete the transaction.
It will take around 2-3 minutes to receive your tokens on Optimism after the transaction has been finished. You can transfer supported stablecoins between Ethereum, Optimism, and Arbitrum in the same way.
I've shown you how to transfer coins to the Layer 2 platforms in order to skin in the game.
Hopefully, after reading this article, you will have a better understanding of the DeFi market and find the best ways to maximize your profits.