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OMG Doubles as a Result of High Ethereum Gas Fees

Last week, CryptoVantage reported that Ethereum fees are at an all time high. This fact has triggered a couple developments in alternative cryptocurrency projects such as OmiseGo (OMG). The core token of the OMG network doubled in the past two weeks, perhaps as a response to the high transaction fees on Ethereum. As CryptoVantage suggested, high Ethereum fees are not sustainable for any business looking to appeal to the masses. In order for businesses who’ve built on top of Ethereum to succeed, Ethereum itself needs to fix its fees. In theory, the release of Ethereum 2.0 will remedy the scaling problem. Although, reports say that the Ethereum 2.0 testnet crashed last week. As Ethereum fees remain as high as they are, projects are moving to other more scalable platforms.

Gas can with Ethereum logo being lifted into air by balloon

Tether the Gas Guzzler Moves to OMG

Tether is at least partially responsible for the Ethereum network congestion resulting in higher fees. In 2019, Tether dethroned Ripple, claiming the spot for third largest cryptocurrency in the world. Tethers usage has been growing near exponentially since its inception in 2014. Now, with the rise of DeFi projects that add additional utility to USDT, we are reaching the limits of what Ethereum can handle. Tether has already deployed its token on seven other networks. Some of these networks are Bitcoin’s Omni network, EOS, Tron, and Ethereum. Now, Tether is being deployed on OMG, a network capable of thousands of transactions per second. This move ideally will help the Ethereum network cut down on its congestion.

Ethereum 2.0 Delay is a Risk to it’s Long Term Viability

Tether, the third largest cryptocurrency by market cap, has already moved some of its operations to another blockchain. This may be an indication of what is in store for Ethereum if it keeps on delaying its 2.0 release. Tether was able to respond to market conditions, and rapidly deploy its operations on a separate blockchain. What about projects looking for a scalable platform from day one? Not only does Eth2.0 delays prompt existing projects to search elsewhere, but it is a deterrent for new developers. All of this ends up being a looming dark cloud over the Ethereum project in general.

The cryptocurrency space is highly competitive. Some projects want to build on Ethereum for the sake of capitalizing on hype. Others are looking for the best technology to build upon. With each passing day, Ethereum looks less and less like the platform that has the best technology. Tether wouldn’t need to deploy its protocol on other blockchains if Ethereum was able to handle the load with ease. Simply because it is the platform with the most locked capital might not be enough to assure its survival.

Looking Elsewhere for Scalable Smart Contract Platforms

There are no shortages of scalable smart contract platforms. If Ethereum moved quickly enough in its early days, then perhaps it may have been able to monopolize the smart contract space. The reality is that there are a number of platforms that do a better job of what Ethereum wants to be. If Ethereum is leading the charge on DeFi, then it is going to have to fix its scaling problems, so that DeFi becomes accessible to everyone. Otherwise, the influencers in the cryptocurrency space will begin to look elsewhere, and explore other smart contract platforms. I think healthy competition is always a good thing in the technology space. However, sometimes competition can dethrone a past major player. Time is running out for Ethereum 2.0.