Tether sent another large batch of tokens to Binance today. The issuer of the popular stablecoin has sent $300 million worth of USDT to the world’s largest exchange by volume. According to the company’s website, 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 see even more USDT ERC20-based transactions, causing further challenges for its blockchain.
300M Worth of USDT Sent to Binance
The transaction was caught by the Twitter bot Whale Alert. Almost immediately afterward, Tether issued a statement with an explanation for the large amount of USDT that had been 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 tokens into ERC20-based ones. This means that the amount is going to be transacted on the Ethereum network.
Ethereum Facing More Challenges?
As reported by CryptoPotato, the number of USDT ERC-20 transactions recently hit an all-time high. Even though their numbers have decreased a bit since September 6 according to Etherscan.io, they still make up a significant portion of all transactions carried out on Ethereum’s network.
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At the time of this writing, Ethereum’s network is at 93% capacity, suggesting 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 developers of other decentralized apps are 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 is something that has to be handled as quickly as possible.
According to Ethereum’s co-founder, Vitalik Buterin, the network’s increasing utilization could cause transaction costs to spike as well. This could make potential corporate users hesitate to use the network.