With the rapid growth of decentralized finance, the upcoming widespread development of Ethereum 2.0 and the increase in cryptocurrency distribution in enterprise wallets, the price of Ether (ETH) is growing rapidly. In fact, we have already seen ETH break the $ 2000 barrier for the first time and set a new record. All of these measures may be optimistic for ETH holders and DeFi investors, but for smaller DApp developers and other users on the network, such as traders using ERC-20 based stablecoins, prices are rapidly dropping.
This is because the cost of using any stable currency depends on the blockchain network in which it operates. Once again, the Ethereum blockchain is suffering from network congestion and fee escalation. On February 23, average transaction fees on Ethereum surpassed $ 39 for the first time, making transactions with ERC-20 tokens such as the Ethereum-based versions of Tether (USDT) and USD Coin (USDC) expensive and even prohibitive.
While Eth2’s transition to proof of effort may hold long-term answers, traders are currently frustrated. The good news is that there are alternatives that allow them to avoid price volatility while maintaining a stable currency value – without paying a hefty network fee.
Relatives: DeFi users should not mess around while Eth2 is landing
USDT and USDC on the Algorand blockchain
As a public, open-source blockchain for smart contracts using a PoS consensus algorithm, Algorand provides the scalability and speed that Ethereum currently lacks. By launching USDT and USDC on Algorand, users can trade their preferred stablecoins in US dollars for a fraction of the cost and time.
The technology behind the Algorand blockchain provides high throughput, which means that more transactions can be processed per second than other similar blockchains such as Ethereum. In fact, Algorand can handle 1,000+ transactions per second compared to Ethereum’s TPS of less than 15.
This means that transactions in Algorand are settled almost instantly – in less than five seconds. Rather than maintaining a whopping $ 39 average, the fees can be as low as $ 0.001 per transaction – regardless of the size of the transaction.
By using the Algorand Standard Asset protocol to generate new tokens, developers can release new ASA tokens for use in a decentralized application, or use it as a way to migrate existing assets to a faster alternative blockchain.
With a market cap now comfortably in excess of $ 35 billion, USDT Tether is the most popular stablecoin in existence and the third largest cryptocurrency by market cap. USDT is currently released on several blockchains including Bitcoin (Omni Protocol), Ethereum (ERC-20 Protocol), Tron (TRC-20 Protocol) and Algorand (ASA Protocol).
At the moment, if the trader wanted to transfer $ 100 (ERC-20), it would cost him around $ 3.43 in gas fees on the Ethereum network. The same treatment with ASA will be 100 times cheaper, which makes it very attractive, especially for high-frequency traders with large volumes.
Continuous development of the cryptocurrency space
Ethereum, which has the largest development environment in the crypto space and the largest number of DApps working on it, understands this better than anyone else. However, there might be some time before Ethereum 2.0 comes out. However, it may be some time before Ethereum 2.0 emerges, and we need alternatives to Ethereum as gas tariffs and network load increase.
Algorand is a technically robust protocol that provides scalability, which is essential for continued adoption of cryptography and an ever-growing space. This is a big step in the right direction as the cryptocurrency approaches regular adoption.
This healthy competition encourages team unification protocols like Ethereum to take advantage of traps around its products and address issues related to scalability, transaction costs, and interoperability. This can only be in the interest of all participants in the network.