This week, the number one stablecoin announced that the Tether integration on the OMG Network is finally complete. The non-custodial Layer-2 scaling solution based on the Ethereum network will now host the stablecoin for transactions. Tether remains to be the largest and most widely used stablecoin in terms of market capitalization and transactions.
Crypto bears and USDT traders are now able to utilize the OMG network to make transactions. As a reminder, OMG’s mission is to reduce network congestion on Ethereum and gas fees. The scaling solution also significantly improves transaction speeds, meaning that transactions will be confirmed faster compared to other networks.
The CTO at Tether, Paolo Ardoino, commented on this by stating, “At Tether we are committed to driving innovation and improvements to our service to better support our customers.” He further noted:
“By migrating USDt value transfers to the OMG Network we save costs, drive performance improvements and relieve pressure on the root chain network. This is good for Bitfinex and our customers, and the whole Ethereum ecosystem.”
Vansa Chatikavanij, CEO at OMG Network, also shared the delight of the newly founded partnership. Chatikavanij stated that the company is excited for the Tether integration to go live on the OMG network and to provide users with faster and cheaper transactions.
“We’re delighted to address these fundamental issues and drive further growth and adoption of open financial services.”Vansa Chatikavanij
Transaction speed and network bottlenecks
While the market is quiet and old-time traders make the majority of trading activity, everyone is happy. However, the situation radically changes once Bitcoin makes a sharp rise or blockchain innovation drives new investors to the space. Truth be told, blockchain technology is still in its early stage and cannot support a massive influx of activity.
With the ongoing ‘DeFi craze,’ investors get a glimpse at what the future holds if prices go higher than the merit they should have. Despite being an utterly bearish outlook on the industry, the reality is that we already have incredibly high fees.
Yield farmers, liquidity miners, and stakers know exactly how much money they spend on fees. Whales seem to be not affected by this as fees comprise only a small part of their total assets. Instead, fees hurt newcomers the most.
In this respect, scaling is still the king. Protocols like the Lightning Network for Bitcoin and the OMG Network for Ethereum seem to be our best bet for a stable market. Otherwise, the next network bottleneck we reach could likewise result in a market top. Partnerships like the Tether integration with OMG are a step towards eliminating this problem. Therefore it is essential to deal with and properly develop the tech before aiming sky-high for prices.
Ethereum’s network congestion fiasco
Rising and staying at the top of 2017’s ICO craze, Ethereum is currently the most valuable altcoin on the market. The problem is, Ethereum has not progressed much as the community expected. Ethereum 2.0 is still not here, and it seems that we are years away from the platform being developed.
2020 now deals with various DeFi projects that gained popularity and financial resources almost overnight, and all of them work on the Ethereum network. We remind readers that ETH’s transaction throughput is capped at around 12 TPS. Gas fees, confirmation times, and various other factors increase in difficulty once we pass a demand of 12 TPS.
Such an event spells catastrophe for the entire altcoin market. An incident like that happened already in March this year and the price of one Ether crashed from $240 to $100. Network congestion likewise caused more than $10 billion to be liquidated as a result of network waiting times increasing to 45 minutes from 15 seconds. On that account, investors will have to wait for a bull market, there are more pressing matters to attend to.