High Ethereum Fees Push Tether to Its Eighth Blockchain, OMG Network
Tether has adopted Ethereum scaling solution OMG Network amid record demand for settlement space on the “world computer.”
“The integration [between Tether and OMG Network] will result in a reduction of confirmation times delivering faster payments while fees will be reduced without compromising on-chain security,” Tether Inc. said in a blog Wednesday.
OMG Network can handle thousands of transactions at a third of the cost of Ethereum as a Layer 2 solution for Ethereum that batches transactions before settlement, OMG Network CEO VansaChatikavanij said in a statement.
Tether – now the third largest cryptocurrency with a market capitalization of $13.1 billion – has become the token of choice for traders. It scores in the top three Ethereum “gas guzzlers” consistently, according to Ethgasstaion.
Adjacently, the cost to transact on Ethereum has grown in near lockstep with the rise of decentralized finance (DeFi) applications (dapps) such as Uniswap and Compound.
Ethereum fees on the rise High growth in both stablecoins and DeFi usage has had adverse results for Ethereum, which settles transactions for both finance applications.
Indeed, on Aug. 13, the average transaction fee on Ethereum broke all time-highs last set during the 2017 initial coin offering (ICO) boom.
Read more: Decentralized Finance Frenzy Drives Ethereum Transaction Fees to All-Time Highs
“By migrating USDt value transfers to the OMG Network we save costs, drive performance improvements and relieve pressure on the root chain network,” Tether CTO Paolo Ardoino said in a statement. “This is good for Bitfinex and our customers, and the whole Ethereum ecosystem.”
Tether issuance can be found on other blockchains including, but not limited to, Omni, Liquid and Tron.
OMG Network will also be used for withdrawals and deposits on Tether Inc. sister firm, Bitfinex, the blog states.
Batching Ethereum transactions on secondary layers, as OMG Network does, has become the preferred solution to scale the network. How to do so remains challenging from a technical perspective, however.
For example, Reddit announced a partnership with the Ethereum Foundation in June to white board possible solutions, such as batching transactions, for its native token.