Tether transactions are currently clogging up the Ethereum Network reigniting the debate over gas limits. The issue might become further exacerbated with Tether’s latest stablecoin launch — a Chinese yuan-pegged ERC-20 token which will run on Ethereum’s blockchain.
There are complaints on Reddit from Ethereum users about delays in their transactions. According to reports, Tether transactions are the reason for the buildup of unconfirmed transactions on the network.
Trustnodes reports that Tether is using up close to half of the computing potential on the network. Data from CoinMarketCap shows daily ETH trading at about $6.5 billion but Tether’s USDT stablecoin transfers top $16 billion per day.
There is however, no clear reason for the sudden strain being put on the network by Tether transactions. Back in 2018, the network could handle more 1.4 million on-chain transactions per day but now is becoming congested with 50 percent of the transaction load.
In July 2019, Binance did state that they would drop Omni-based USDT in favor of the ERC20 USDT counterpart. Tether accounts for a significant portion of the global cryptocurrency trade, providing liquidity for exchanges who otherwise cannot transact in U.S. dollars.