Ethereum's high fees push Tether to look for a solution in the OMG Network

Ethereum's high fees push Tether to look for a solution in the OMG Network - Tether reserves.width 800 1200x630 cropped 1024x538Tether has adopted Ethereum's OMG Network scale solution - here the quotation in real time - in its current phase of record growth involving a huge demand for space on the "world computer".

Get around the obstacles

"The integration [between Tether and OMG Network] will result in reduced confirmation times by offering faster payments, while commissions will be reduced without compromising security on the chain," Tether Inc. said in a post Wednesday.

OMG Network can handle thousands of transactions for a third of the cost of Ethereum as a Layer 2 solution on Ethereum that bundles transactions before confirmation, OMG Network CEO Vansa Chatikavanij 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.

According to Ethgasstaion, it consistently ranks among Ethereum's top three gas guzzlers. In other words, the total value of the fees paid for Tether transactions on the Ethereum blockchain is among the highest in the crypto ecosystem.

But the cost of transacting on Ethereum has grown almost hand in hand with the rise of decentralized finance (DeFi) applications (dapps) like Uniswap and Compound.

Growing Ethereum fees

The high growth of both stablecoins and DeFi usage has had negative results for Ethereum, which regulates transactions for both financial applications.

In fact, on August 13, the average transaction fee on Ethereum surpassed all historical highs, reaching double the average recorded during the Initial Coin Offering (ICO) boom of 2017.

And that trend doesn't seem to want to slow down, as the immense growth of the DeFi industry shows no signs of downsizing. “By bringing the value generated by USDT transfers to the OMG network, we are saving costs, driving performance improvements and easing the pressure on the main chain network,” Tether CTO Paolo Ardoino said in a statement.

"This is good for Bitfinex, our customers and the entire Ethereum ecosystem." The Tether issuance can also be found on other blockchains including, but not limited to, Omni, Liquid and Tron. OMG Network will also be used for withdrawals and deposits from Tether Inc.'s sister company Bitfinex, the post states.

Batching Ethereum transactions on the secondary tiers, as OMG Network does, has become the preferred solution for scaling the network. However, from a technical point of view, making this solution operational remains challenging.

For example, Reddit announced a partnership with the Ethereum Foundation in June to lay out possible solutions, such as batch transactions, for its native token.