Tether developers have launched USDT stablecoin on Hermez Network – Ethereum’s second tier solution. The project uses zero knowledge ZK-Rollups technology to reduce the load on the underlying blockchain.
Hermez Network’s Ethereum scaling solution launched a month ago, and at the beginning of the year, Hermez developers added support for the USDT stablecoin to reduce transaction fees on the Ethereum network.
Through the launch of USDT on Hermez, Tether hopes to solve the problem of high fees on the Ethereum network, where Tether has consistently ranked among the largest gas users. Since the commission for transferring USDT to Ethereum in recent months has always been above $ 10, and exchanges are raising commissions for withdrawing the crypto asset in response, the market has significantly diversified the use of Tether.
Carry-over value in USDT on Ethereum, Tron and Omni. Source: Coinmetrics
Back in January, the number of USDT transactions on the Tron blockchain surpassed that of Ethereum for three consecutive weeks, amid continuing high fees on the Ethereum blockchain. Hermez provides an Ethereum-based alternative to Tron.
Currently, Hermez can be accessed using the MetaMask linked to the user’s wallet. Online transactions require the execution of a deposit transaction from the Ethereum main chain, after which the money becomes available in a roll-up. However, without a significant number of possible withdrawals, Hermez risks being left behind by competition from other sidechains and tier 1 networks. The Hermez team is aware of this predicament and is working to integrate with as many exchanges as possible, but it remains to be seen if the effort will be successful.
Roll-ups (rollups) are second-tier solutions that process and store transaction data on the sidechain before aggregating transaction bundles into the main Ethereum network. Ethereum developers hope to address high fees with roll-ups in the short term and sharding after Ethereum 2.0 is fully deployed.
A key feature of roll-ups is the concept of data availability. This means that the data on the state of the rollup is always fully available within the network, i.e. Ethereum knows the cryptoasset balances of all user accounts in the Hermez rollup after each transaction. This allows you to quickly withdraw money and distribute it to new owners in case of failures.
Zk-Rollups can be viewed as separate blockchains, the security of which is completely dependent on the first level network. Through the use of zk-SNARKs, the Hermez rollup regularly publishes evidence for the Ethereum network, which verifies its correctness.
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