By
Temitope Olatunji
April 19th, 2024
Tether stablecoin owned by Bitfinex has announced the decision to integrate with a newly-launched OMG plasma network that is a plasma-based Ethereum sidechain.
With gas costs on the Ethereum network prone to spikes due to congestion, Tether the stablecoin owned by Bitfinex, has announced an integration with the recently-launched OMG plasma network. This enables cheaper and faster transactions and higher reaction time for traders who mostly use the stablecoin in trades.
According to a recent release by Bitfinex chief technical officer (CTO), Paolo Ardoino, the migration of some of the volume of Tether transactions would ease the pressure on the Ethereum network which before now bore the weight of all transactions of the Tether platform. Ardoino said:
“By migrating USDT value transfer to the OMG Network, we save costs, drive performance improvements and relieve pressure on the root chain network”.
Main Gas Guzzler on Ethereum Network
Data from ETH Gas Station shows that Tether is by far the highest guzzler of gas on the Ethereum network with the network consuming more gas than the next five platforms combined. OMG Network is a plasma-based Ethereum sidechain launched on June 1. It was formerly known as OmiseGo.
In the month of May, Tether gas fees on the Ethereum network were 8,900 ETH or the equivalent of ($1.8 million). Shedding some of the transaction cost makes business and technical sense considering that the Ethereum network has had scaling issues in the past. Gas fees on the network usually soar when it clogs due to high traffic. Under such circumstances, transaction confirmation times could extend to days.
More Exchanges and Wallet Providers Integration
Traders wanting to access the OMG based Tether network can do that through Bitfinex. This is the only channel available in the meantime according to Ardoino who said that it offers traders greater opportunities in terms of reaction time to market changes. The OmiseGo chief operations officer (COO) Stephen McNamara in an interview with CT stated that the project is ongoing with the expectation that OMG would be integrated with other exchanges and wallet providers.
The Ethereum plasma was promoted as the second layer solution for scaling, but it has not lived up to its billing causing attention to be shifted to Optimistic Rollups. The OMG Network’s plasma sidechain is based on Proof of Authority consensus with its whitepaper showing that a single entity operates it. Watcher nodes add a measure of decentralization through its verification of the authenticity of transactions.
The project surmounted the setback of previous plasma solutions by making the so-called “mass exit” from the sidechain impossible. This was accomplished by limiting the number of chains created. ETH fees are reduced by 66% on the network while support for ERC-20 tokens and ETH is supported.