Recently, Crypto exchange Bitfinex and DeversiFi announced the launch of the first bridge between a centralized and Layer-2 decentralized exchange to enable fast and low-cost transfers for ERC-20 tokens.
According to Bitfinex the bridge will offer users access to the permissionless and privacy-centric experiences of decentralized finance (DeFi) systems, along with the highly liquid, accessible features of centralized finance (CeFi) institutions. Initially transactions will be exclusive to Tether tokens(USDt), which is a stable coin affiliated with the exchange. Transfers will eventually open up to various ERC-20 tokens in the near future.
"With centralized exchanges seen as the entry point into cryptocurrency for many users, the new bridge will propel further adoption of decentralized finance (DeFi) by providing traders from both exchanges access to the opportunities on each platform without having to transact on Layer-1 (L1) Ethereum." wrote Bitfinex.
Source: Bitfinex
According to the announcement, DeversiFi will now also serve as a highway between the Polygon network and Bitfinex. Till now DeversiFi acted as a gas-free L2 DeFi hub for Bitfinex traders to get access to some of the best opportunities and yields in DeFi.
Built upon StarkWare’s scalable technology DeversiFi is an Ethereum-based trading platform. It launched the first layer-2 bridge, a month ago, between Ethereum and Polygon Network.
Bitfinex said that now, people will be able to seamlessly move investment from the Polygon network to Bitfinex using DeversiFi, without paying expensive on-chain gas costs.
It is worth noting that L2 platforms like Arbitrum and Optimism have seen a substantial rise throughout in past one year, contributing to the further adoption of decentralized finance protocols.
Bitfinex is certain that there will be a ready uptake of this low-cost transfer implement among its customer base as interest in DeFi continues to grow.
Founded in 2012, Hong Kong-based cryptocurrency exchange Bitfinex offers services for digital currency traders and global liquidity providers. Apart from advanced trading features and charting tools, the exchange provides access to Exchange Trading, Margin Trading & Funding, Over the Counter (OTC), and Derivatives for a wide selection of digital assets.