Tether has switched its focus to Ethereum, and it's already putting a heavy load on the blockchain platform. The stablecoin was mostly based on Bitcoin (via a tool called the Omni layer) but has recently swapped the majority of its tokens over to Ethereum instead.
In fact, since July, the number of Ethereum-based Tether transactions has increased from around 18,000 per day to 187,912 as of September 9, according to data from Coin Metrics. These transactions now account for 25% of all Ethereum activity.
Tether is making full use of the Ethereum blockchain. Photo credit: Coin Metrics
And it's starting to play havoc with the network. The amount of Gas used per day (a second cryptocurrency used to pay transaction fees) has risen to, at one point, 50 billion Gas ($183,000). This is up 152% since lows in July and is on track to surpass Bitcoin's daily transaction fees, which currently sit around $186,000. People making Tether transactions are now paying $21,000 a day in transaction fees—$525,000 over the last month—on Ethereum alone.
In response, Ethereum miners are testing raising gas limits, to allow for more transactions per block. This is roughly equivalent to increasing the block size for Bitcoin blocks.
However, when looking deeper—it's not just Tether that has been clogging up the network.
A provably fair betting game, called Fair Win, is also on par with Tether's transaction fees–it spent some $531,000 over the last month.
While Ethereum is making developments on its scaling solution, called Ethereum 2.0, it's still a long way away, which begs the question: How will the network cope until then?