One of the little hidden problems with Centralised Exchanges (CEXs) is the fact that withdrawal fees can be a bit of a mixed back and generally not something that one really takes into account until the moment that you actually try and withdraw your crypto assets into your own private wallets. Now, for the exchanges that I use, Binance and FTX have proven to have the most acceptable withdrawal fees. Meanwhile, I have found that Kucoin, MXC, Coinbase, Crypto.com and CoinList have withdrawal fees that verge from slightly unsettling to hideously painful!
Of course, if you are transacting in gigantic amounts... the withdrawal fees aren't that big a deal... but for most people, they are. Combined with the fact that most of the easy on-ramps for fiat are operated by these CEXs, it means that a great amount of low-medium retail investment money is going to be stuck on exchange... just because the barrier to exiting is just that little bit higher from the withdrawal fee amount.
Add to this that the withdrawal fees are almost always denominated in the withdrawal asset and NOT the actual native blockchain coin which can be a little bit annoying at times. Plus, they often don't update in real time, which means that they need to be a little bit on the high side in case there are network fee spikes due to congestion... or withdrawals go offline for a little bit.
So, I've been playing around on the L2 Ethereum for quite a while... mostly on xDAI, Polygon and Optimistic Ethereum and I have definitely enjoyed the experience of the faster and lower cost networks. Of course, they come with the different trade-offs that come with using a sidechain or Layer 2... these being either more centralisation in network and bridges (Polygon) or 7 day delays in withdrawal to L1 due to the way that Optimistic Rollups work (OE).
Playing around on more Layer 2s has been a bit hampered by the lack of easy L2->L2 bridges (Cbridge and Hop Protocol are the only ones that I'm familiar with). Especially painful moments are if the L2->L2 bridge involves an intermediary L1 stop... with all the attendant gas problems thanks to NFT congestion on the Ethereum mainnet.
What I have been wondering about is why exchanges haven't been offering L2 withdrawals. It could definitely be a problem with the speed with which Ethereum L2s have been rolling out... but OE and xDAI have been around forever... and Polygon has also been around for a while as well. I think it is likely a problem of how and where to place liquidity for the CEXs in order to cover all possible options for withdrawal.
That said, I was really quite happy when Crypto.com offered a deposit/withdrawal service on Polygon last month! For me, this is really quite handy... as Crypto.com is one of my preferred fiat on-ramps (due to the VISA debit card) but not a preferred withdrawal service. Binance WAS my preferred fiat->crypto on ramp... but they have had problems with SEPA for quite a while, and I'm finished testing out a different option via FTX (write up coming soon...).
... and of course, even more recently... Arbitrum! I was looking for a way to easily bridge to Arbitrum (Optimistic rollups L2, similar to Optimistic Ethereum). This could be the easiest way to explore that particular new launch!
So, I have ignored Crypto.com for quite some time... but they really have stepped up the game with the L2 withdrawals and deposits at the same time that Binance is fumbling with regulators. I hope this opens up the doors for other exchanges to follow in their footsteps to start rolling out Ethereum L2 withdrawal and deposit options... L1 is now too tricky for most people to use in a rational way, and direct to L2 is what most of us need!
Handy Crypto Tools
Ledger Nano S/X: Keep your crypto safe and offline with the leading hardware wallet provider. Not your keys, not your crypto!
Binance: My first choice of centralised exchange, featuring a wide variety of crypto and savings products.
Kucoin: My second choice in exchanges, many tokens listed here that you can't get on Binance!
FTX: Regulated US-based exchange with some pretty interesting and useful discounts on trading and withdrawal fees for FTT holders. Decent fiat on-ramp as well!
MXC: Listings of lots of interesting tokens that are usually only available on DEXs. Avoid high gas prices!
Coinbase: If you need a regulated and safe environment to trade, this is the first exchange for most newcomers!
Crypto.com: Mixed feelings, but they have the BEST looking VISA debit card in existence! Seriously, it is beautiful!
CoinList: Access to early investor and crowdsale of vetted and reserached projects.
Cointracking: Automated or manual tracking of crypto for accounting and taxation reports.
Stoic: A USD maximisation bot trading on Binance using long-term long strategies, powered by the AI/human system of Cindicator.
StakeDAO: Decentralised pooled staking of PoS assets.