Tether to Add Layer 2 Solution, ZK-Rollups, to Reduce Congestion On Ethereum's Network

Tether announces plans to integrate ZK-Rollups, a second layer solution using zero knowledge proofs to bundle up transactions as one to reduce the burden on Ethereum-based USDt transactions. Integration of Layer 2 solutions is becoming an ever growing concern for Ethereum users after the recent spike in gas fees in tandem with DeFi market growth.

ZK Rollups is an implementation built on top of the Ethereum network, leveraging zero knowledge proofs to bundle up transactions and send them, improving scalability on the blockchain. ZK, or zero knowledge is required of the transactions. This hence reduces computing and storage resources for validating the block by reducing the amount of data held in a transaction.

Speaking on the integration, CTO of Tether, Paolo Ardoino, named ZK-Rollups as the most comprehensive and most preferred second layer solution on Ethereum as it works on-chain.

Tether is working on reducing the amount of transactions conducted on the Ethereum blockchain in a bid to decongest and probably reduce the fees. Recently, the stablecoin was added on OMG Network, also a layer 2 solution, as a sidechain to help in scaling Ethereum and reduce the skyrocketing transaction fees.

The growth of Tether’s demand has been majestic over 2020 as Tron and Ethereum both hold more USDt than the Bitcoin network. The token set an all-time high market capitalization as reported by BEG after a frenzy across the DeFi space caused a spike in demand.

The demand of USDt – as the largest stablecoin – has seen it flip the number of transfers and transactions made on the largest blockchain, Bitcoin. According to a Coinmetrics report, the 7-day average adjusted transfer value of Tether broke the $3 billion mark, finally reaching $3.55 billion compared to Bitcoin’s $2.94 billion as of Aug 25.

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Lujan Odera
Lujan Odera
Lujan is a blockchain technology and cryptocurrency author and editor. He has worked in the field of cryptocurrencies and blockchain technology since 2015 helping him gain enough experience to be the writer he is today. He is known for his simple writing style that allows novices to understand the field in the simplest way.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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