Bitfinex-owned Tether stablecoin announced a decision to integrate with the recently launched OMG plasma network, which is the Ethereum side chain.
As the cost of gas in the Ethereum network is subject to sharp surges due to congestion, Tether, the Bitfinex stablecoin, announced the integration with the recently launched OMG network. This provides cheaper and faster transactions and faster reaction times for traders who mainly use stablecoin in transactions.
According to a recent release by Bitfinex CTO Paolo Ardoino, the migration of some Tether transaction volumes will ease the pressure on the Ethereum network, which so far has carried the weight of all Tether platform transactions. Ardoin said:
“By moving the transfer of USDT values to the OMG network, we save costs, increase productivity and reduce the load on the root chain network.”
Gas in the Ethereum network
ETH gas data shows that Tether is by far the largest gas production on the Ethereum network, as the network consumes more gas than the next five platforms combined. OMG Network is an Ethereum sidechain launched on June 1st. Previously it was called OmiseGo.
In May, the Tether gas charge on the Ethereum network was 8 ETH or the equivalent ($ 900 million). Losing part of the transaction value makes business and technical sense, given that in the past the Ethereum network had problems with scaling. Gas charges on a network usually increase when it becomes clogged due to heavy traffic. In such circumstances, the transaction confirmation time may be extended to several days.
Exchange and wallet integration
Traders wishing to access the OMG-based Tether network can do this through Bitfinex. This is the only channel currently available, according to Ardoino, who said he offers traders more options in terms of reaction time to market changes. OmiseGo Operations Director (COO) Stephen McNamara said in an interview that the project is ongoing, expecting OMG to be integrated with other exchanges and wallet providers.
The side chain of OMG Network is based on the consensus of the Proof of Authority with its technical paper showing that it is managed by a single entity. Observer nodes add a measure of decentralization through transaction authentication.
The project overcame the failure of previous decisions, making the so-called "mass exit" from the side chain impossible. This was achieved by limiting the number of chains created. The commission on the network is reduced by 66%, while support for ERC-20 and ETH tokens is supported.