The YFI creator Andre Cronje, says that there’s a lot of effort going into the crypto industry recently to alleviate the pressure some of the coins felt on the Ethereum network. Stablecoins make a huge chunk of the steep fees and they could all switch to Layer 2 for relief as we are about to read more in our Tether crypto news today.
The YFI creator Andre Cronje, suggested that USDT and USDC will soon be available on Layer 2 since the stablecoins make the transition away from Ethereum. The comment came in the wake of a huge month for ETH transactions which saw them surge to new levels in terms of costs and amount. Cronje added that he believes stablecoins should be seen as trade instruments and not currencies.
USDC and USDT will soon both be available on L2.
This will allows non-congested transfers of USDC and USDT.
This is great if you do payments in USDC and USDT.
From my experience USDT and USDC are trade instruments. Not currency. How much will really move to L2?
— Andre Cronje (@AndreCronjeTech) September 7, 2020
DeFi analyst Chris Blec replied that all L2 solutions could provide Centre and Tether with an easier way to force regulatory compliance via KYC if they require whitelisting. Layer 2 is actually a blockchain scaling solution that uses the technology as side chains and ZK-rollups to enable faster transactions by simply taking the data off the main chain. A zk-rollup is a zero-knowledge proof that secures some of the data off the chain and eases the load on it.
Tether integrated into the Layer 2 OMG network which is known as OmiseGo and operates on the Plasma. USDT holders will be able to transact over this network to save some fees and decrease the time take for it to get verified. Tether moved a chunk of its supply to other networks such as EOS, Algorand, and TRON but the ultimate solution could be the switch to layer 2. According to the Tether transparency report, more than 62% or $8.9 billion USDT is still on the ETH network.
ETH Gas station reported that in terms of fees, Tether generated more than $10.5 million over the past 30 days second to Uniswap which generated 20% more. USD coin which is a dollar-pegged crypto stablecoin by Circle is also gaining traction in the Defi sector as an alternative to Tether. With ETH 2.0 Phase 1 on the way, scaling solutions for the biggest smart chain network will not be here soon enough. It has come as some relief that the average transaction fee on ETH dropped by 80% this month to $2.84 from the previous $14.58. The spikes tend to be correlated with the new offerings in the DeFi craze as the fees are unlikely to remain low for long.
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