Tether has sent out another large portion of USDT towards Binance today. The issuer of the most popular stable coin has sent $300 million worth of USDT to the world’s largest exchange. According to the official page, it’s because they are conducting another chain swap from the Omni protocol to the ERC20 one. This could mean that the Ethereum network will get even more USDT ERC20-based transactions on it, causing further usage and potential challenges for its blockchain.
300M USDT Sent To Binance
Tether, the issuer of the most popular stable coin USDT, has transferred 300 million USDT to the world’s leading cryptocurrency exchange, Binance. The transaction was caught by the Twitter bot Whale Alert.
Almost immediately after that, Tether fired a statement with an explanation for the large amount of USDT being transferred.
In few hours Tether will coordinate with a 3rd party to perform a chain swap (conversion from Omni to ERC20 protocol) for 300M USDt. Tether total supply will not change during this process.
— Tether (@Tether_to) September 12, 2019
Apparently, they are doing yet another chain swap, converting Omni-based USDT into ERC20-based ones. This means that the amount is going to be transacted on the network of Ethereum.
Ethereum Facing Further Challenges?
As reported by CryptoPotato earlier, USDT ERC-20 transactions hit their all-time high recently. Even though according to Etherscan.io their number has decreased a bit since September 6th, they still make up a significant portion of all the transactions carried out on Ethereum’s network.
At the time of this writing, Ethereum’s network is working at 93% capacity, meaning that there’s only 7% left before it reaches the maximum. This suggests that there is little to no room left for new projects to use the blockchain.
This is a growing concern because Tether has become one of the main projects to use the network and other developers of decentralized apps are steadily getting left behind.
While there are some solutions in the making, including Sharding and Plasma, it appears that the scalability issue is becoming a major concern for Ethereum and something that has to be handled as quickly as possible.
In the words of Ethereum’s co-founder, Vitalik Buterin, the increasing utilization could cause the transaction costs to spike up as well. This could make potential corporate users hesitate to use the network.