We are pleased to announce that Tether (USDt) is live on the OMG Network transport layer.
— Tether (@Tether_to) August 19, 2020
The OMG Network will immediately be used by Tether’s partner exchange, Bitfinex, to facilitate more rapid deposits and withdrawals of USDT in times of market stress.
The news comes on the back of OMG Network’s L2 announcement a few months back, setting the stage for the integration which went live this week.
Ethereum, which serves as the network for most of Tether’s USDT token transactions, has been struggling to cope with transaction loads this year. High traffic from token transactions and dApp use has sent transaction costs and waiting times through the roof on several occasions – most notably during the market’s flash-crash in March.
Enter OMG Network
Tether hopes that the OMG Network – a layer 2 scaling solution for Ethereum – will allow its user base to transact much more quickly in times of market stress, at just a fraction of the cost.
The OMG Network has the capacity to process several thousand transactions per second, at a fraction of the cost of base-layer Ethereum transactions. This is achieved by batching larger groups of transactions within a single block on Ethereum, reducing transaction times, and costs for its users.
The significance of Tether’s USDT
Tether’s USDT token is by far the largest stablecoin in the cryptocurrency ecosystem, routinely making up over 40% of all cryptocurrency trading volume. Its total market cap has now crossed $13 billion, according to Messari metrics.
On-chain data from EthGasStation.info shows that Tether is second only to Uniswap in its fees paid to Ethereum miners over the last month of activity, accounting for a substantial proportion of the entire network’s activity.
The migration to L2 comes as one of the first major projects to move off the base layer. We expect many projects to follow with teasers like Synthetix Layer 2 exchange and Uniswap’s Unipig demoing the potential for instant settlement using Optimistic Rollups.
To stay up with OMG Network, follow them on Twitter!
Alejandro is a blockchain writer and consultant who has been involved in the space since early 2016. Being extremely passionate about this emerging technology, he has written content for a myriad of projects and news outlets.