To avoid the congestion and high commissions that have been registered in Ethereum, Tether integrates the stablecoin or stablecoin USDT to the OMG Network side chain.
Tether Inc. Company announced the decision through a blog post. The brief notes that enabling USDT value transfers on the OMG (formerly OmiseGO) network saves costs, drives performance improvements, and relieves pressure on the Ethereum network.
OMG Network CEO Vansa Chatikavanij mentioned the integration noting that Ethereum’s sidechain “supports thousands of transactions per second at one-third the cost of the same transaction on the mainnet.” This refers to the high amounts that have been registered in the network commissions since last July.
The idea of integrating USDT to the Ethereum side chain is to help decongest the network; taking into account that tether has become one of the most used cryptocurrencies by merchants on the platform.
Using the Sidechain for Scaling
Using the sidechain is one of the most viable scaling solutions in the face of the congestion that Ethereum has been registering. Hence the choice of OMG Network, a second layer solution released in late 2019 after its establishment in 2017.
OMG is a decentralized platform for peer-to-peer transactions without intermediaries, which tries to facilitate financial services. It works based on Plasma, a framework developed to build scalable applications and off-chain solutions, among which is also the Matic Network.
The sidechain allows users to transfer ether (ETH) and ERC-20 tokens quickly. It makes it easy to do transactions through channels external to the Ethereum chain, compiling a group of operations, and then incorporating them into the network through input, and output channels implemented to support the operation of the protocol.
The operations that are executed in this second chain are periodically established in the Ethereum network. Based on this operation, the Bitfinex exchange will facilitate deposits and withdrawals of USDT through OMG. “This will allow users to arbitrage between various platforms as the network grows,” says Tether Inc.
With the integration to OMG, the stablecoin tether is now working on seven blockchains, including OMG Network: Ethereum, Algorand, EOS, Omni, Tron, and Liquid Network (Bitcoin side chain).
Ethereum Commissions Start to Decline
Beginning with the integration of USDT into the OMG sidechain, the transaction costs on Ethereum have started to decline recently after hitting an all-time high on August 13th. For August 22nd, the average rate is estimated at just over $2. The decline comes after having reached a peak of more than $ 7 per transaction.
During this same week, there is a notable drop in the prices of ether (ETH). According to Live Coin Watch statistics, the cryptocurrency has lost more than 8% of its value in the last 7 days. Simultaneously with the rise in commissions, ETH had been on the rise since July, reaching its highest values until now in 2020, exceeding $ 440.
By Jenson Nuñez.
