Think of OMG Network as a super-highway built on top of Ethereum Road, with Bitfinex being the first stop. As of now, USDt deposits & withdrawals (cars) can use our super-highway to get to Bitfinex or exit back to Ethereum Road. As we add more stops by integrating with more exchanges, we’ll have an interconnected super-highway primed to reduce Ethereum congestion and crypto exchange fees (toll).
The OMG Network’s value proposition was best described by our COO, Stephen McNamara:
Why did OMG Network integrate with Tether (USDt) to reduce crypto exchange fees?
High crypto exchange fees occur because the Ethereum blockchain is a valuable but limited resource. Exchanges and their users compete for this high-cost computational resource by sending and receiving value. But when demand is too high, Ethereum faces severe network congestion and transaction fees and times shoot up.
Further bombardment of the rootchain prevents arbitrage from happening across exchanges, making each market a price island, and sky-rocketing crypto exchange fees. That’s when severe instances like the March 12th pandemic flash-crash can occur.
We chose USDt because we know it makes up most transfers moving across exchanges, contributing to a large portion of the transaction fees on Ethereum. By supporting USDt value transfers, the OMG Network can offload some of Ethereum’s burden, helping the entire ecosystem by lowering fees, helping price transparency, fairness, and improving market liquidity. Let me illustrate with an example.
- Exchange A’s users make about 200K withdraws/month;
- Exchange B’s around 150k;
- Exchange C’s around 100k;
- Assuming we capture withdraw and deposit, we can move up to 450,000 x 2 = 900,000 transactions off Ethereum/month
- Assuming each transaction costs 1.5 USD, and the OMG Network charges 1/3rd the gas fees of Ethereum, we reduce crypto exchange fees from 1,350,000 USD to 445,500 USD.
Building The Future’s Financial System on The Ethereum Blockchain
Tether is the easiest way to hold a relatively stable volume of value at an exchange that doesn’t accept dollars. It’s much more about that [USDt] network effect than any technology, infrastructure or other advantage.Why Tether Volume Is at All-Time Highs
A year after China banned local fiat on-ramps for crypto exchanges, Chinese traders continue to drive the market forward by using the dollar-pegged stablecoin tether (USDt).Why Tether Volume Is at All-Time Highs
The Time To Build a Layer-2 Money Highway Is Now
Connie ensures product and marketing excellence by building high functioning teams. Previously, she was Head of Product for Atlassian’s Marketplace and Developer Ecosystem, delivering the second largest B2B Marketplace and associated API suite. She has also led teams at Microsoft, Cypress and SunPower.Connie Kwan, VP of Product & Marketing, OMG Network
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