Bitcoin

Ethereum fees are skyrocketing, but traders have alternatives

With the rapid growth of decentralized financing, the upcoming scaling developments in Ethereum 2.0 and an increasing allocation of crypto currencies in the portfolios of the institutes, the price of Ether (ETH) is rising rapidly. In fact, we’ve seen it before ETH breaks the $ 2,000 mark for the first time. set a new historical record. All of these measures can be optimistic for ETH owners and DeFi investors. For smaller DApp developers and other network users, e.g. B. Merchants who use ERC-20-based stablecoins, however, will close them quickly.

This is because the cost of using stablecoin depends on the blockchain network in which it works. Once again, the Ethereum blockchain is plagued by network congestion and rising fees. On February 23, the average transaction fee for Ethereum topped $ 39 for the first time, making transactions using ERC-20 tokens such as the Ethereum-based versions of Tether (USDT) and USD Coin (USDC) expensive and even unaffordable.

While Eth2 may have long-term answers with its transition to proof-of-stake, traders are frustrated right now. The good news is that there are alternatives that can help you avoid price fluctuations by keeping their value in stable currencies without paying high network fees.

USDT and USDC on the Algorand blockchain

Ethereum fees are skyrocketing, but traders have alternatives
Ethereum fees are skyrocketing, but traders have alternatives

As an open source blockchain for public smart contracts using a PoS consensus algorithm, Algorand offers the scalability and speed that Ethereum currently lacks. By running USDT and USDC on Algorand, users can transact their preferred US dollar stable stablecoin at a fraction of the cost and time.

The technology behind the Algorand blockchain enables high throughput, which means that more transactions can be processed per second than with other comparable blockchains such as Ethereum. In fact, Algorand can process more than 1,000 transactions per second, compared to Ethereum’s TPS of less than 15.

This means that Algorand transactions are processed almost instantly in less than five seconds. And instead of enduring a high average of $ 39, fees can be as low as $ 0.001 per transaction regardless of the size of the transaction.

By using Algorand’s standard asset protocol to create new tokens Developers can release new ASA tokens for use in a decentralized application. or use them to move existing assets to a faster alternative blockchain.

With a market cap well over $ 35 billion, Tethers USDT is the most popular stable coin on the market and the third largest cryptocurrency by market cap. USDT is currently issued on a number of blockchains including Bitcoin (Omni protocol), Ethereum (ERC-20 protocol), Tron (TRC-20 protocol), and Algorand (ASA protocol).

Currently, if a merchant wanted to transfer 100 USDT (ERC-20) it would cost around $ 3.43 in gas fees from the Ethereum network. The same transaction with ASA would be 100 times cheaper, which would make it extremely attractive, especially for high-frequency, high-volume traders.

The advancement of the cryptocurrency space

Ethereum, with the largest developer community in the crypto space and by far the largest number of DApps running on it, understands this better than anyone. The rollout of Ethereum 2.0 could still take a while, however, and we need alternatives to Ethereum and its rising gas fees and network congestion.

Algorand is a technically robust protocol that offers the essential scalability for an increased introduction of cryptocurrencies and the continuous growth of storage space. And it’s a big step in the right direction as cryptocurrency approaches mass adoption.

Healthy competition like this is an incentive for Layer 1 protocols like Ethereum to widen the gaps around their products and solve problems related to scalability, transaction costs and interoperability. And that can only be good for all participants in the network.

This article does not contain any investment recommendations or recommendations. Every trading and investment step is associated with risks. Readers should do their own research in making their decision.

The views, thoughts, and opinions expressed herein belong solely to the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Jay hao is a technology veteran and a seasoned industry leader. Prior to OKEx, he focused on blockchain applications for live video streaming and mobile gaming. Before entering the blockchain industry, he had 21 years of solid experience in the semiconductor industry. He is also a recognized leader with successful product management experience. As the CEO of OKEx and a staunch supporter of blockchain technology, Jay believes that the technology will remove barriers to transactions, increase efficiency and ultimately have a significant impact on the global economy.

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