High Fees Battle: Tether Users Flips Ethereum for TRON Amid High Fees
January 24, 2021 9:03 AM
Transactions using Tether dollar-pegged stablecoins on the TRON blockchain are outpacing those on Ethereum according to recent reports.
In a bull market, Tether transactions are on the rise but in a different place than most of you might expect with high fees on Ethereum appearing to be pushing people to use TRON for transfers of Tether, the world’s largest and most-popular stablecoin.
This could be an indication to Ethereum community that high fees will drive cryptocurrency traders to other low cost effective blockchains, threatening Ethereums growth if it doesn't scale up its network faster it might be dumped by the trading community.
According to CoinMetrics a blockchain data provider, the recent reports showed there have been more transactions on the TRON blockchain than Ethereum blockchain everyday from Jan 1st 2021, despite Ethereum controlling 50% more Tether Tokens than TRON blockchain.
Tether which was founded in 2014 provides dollar-pegged stablecoins on blockchains such as Ethereum, TRON, and recently Solana. Stablecoins are used by crypto traders as stable assets like cash as a means of moving out of positions in a move to manage volatile cryptocurrencies.
Ethereum blockchain transaction fee have stayed high at an average of $6 per transaction, it was only reported by BitinfoCharts a blockchain data provider late in 2020 when Eth Fee stayed above this price for only 12 days over the whole year.
DeFi the Major Reason for High Ether Transaction Fees
Various DeFi protocols have gained adoption with several promises in terms of replicating financial services such as loans, swap, interest yielding in decentralized nature by the use of smart contracts deployed on Ethereum network, this boom in DeFi (Decentralized Finance) from may 2020 made Ethereum transaction fees spiked above historic level.
Meanwhile, TRON fees per average transaction is less than a cent.
Nevertheless, high fees on Ethereum may incentivize Tether users to make the switch to TRON and bring some much-needed strength to competitor chains with low fees.