Tether USDT Partners With OMG Network for L2 Scaling DeFi Rate

The leading stablecoin Tether has announced they are leveraging OMG Network to circumvent congestion issues from Ethereum.

We are pleased to announce that Tether (USDt) is live on the OMG Network transport layer.

Read our full announcement ⬇https://t.co/aeKiyyGxmf pic.twitter.com/5EKJGUPxjM

— 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.

Heavy use of the Ethereum network has ensued yet again recently, as traders scramble for token swaps on DEXs like Uniswap.

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.

Tether transaction fees are second only to Uniswap on the Ethereum Network

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.

Other exchanges like DeversiFi and dYdX have partnered with StarkWare and their StarkEx engine, proving to be a good breeding ground for DEXs which prioritize privacy.

To stay up with OMG Network, follow them on Twitter!

The post Tether USDT Partners With OMG Network for L2 Scaling appeared first on DeFi Rate.

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