The most popular USD pegged stablecoin Tether that is the second biggest gas guzzler on the Ethereum network recently adopted OMG Network for the settlement.
This integration between Tether and Layer 2 solution for Ethereum – OMG Network is expected to result in a reduction of fees and confirmation times, which has become extremely important in recent times because of the skyrocketing fees and congestion on the second largest network.
In the first half of August, USDT transfers accounted for 14% of all fees spent on Ethereum. Out of the total $12.9 billion supply of USDT, $8.6 billion (66.6% of all supply) is issued on Ethereum. Just this week, 1 billion TRC20 USDT coins were also swapped into ERC20.
The primary reason meanwhile for the jump in the cost to transact on Ethereum is DeFi applications such as Uniswap, as per ETHGasStation.
This week, the average transaction fees on Ethereum jumped to its all-time high at $6.6 but since then it has dropped 80% to around mid-July levels which as Santiment puts it is a “nice opportunity for significantly cheaper on-chain operations.”
The immense growth in stablecoins and DeFi usage has been having an adverse result on Ethereum.
As we reported, the debacle of the DeFi experiment YAM. Finance was the real culprit for pushing the Ether fees so high, that wasn’t seen since the launch of the platform in 2015.
The average gas price that has also jumped over 260 Gwei has also come down to about 110 Gwie level, as per Blockchair.
However, the gas usage continues to hit a new all-time high which means the usage of the network hasn’t slowed down, close to hitting 80 billion per day.
This could be because of the transaction count on the network, which dropped to 612k today, down from over 1.2 million on August 10, inches away from the all-time of 1.34 million on January 4, 2018, during the peak of the last bull run.
Much like these metrics, the price of Ether also took a fall. ETH dropped over 13.5% to $380 in line with Bitcoin falling under $11,400 which has been because of the strengthening US dollar index. At the time of writing, Ether has been trading at $392, still in the red but up 198% YTD.