The OMG network announced on Jun 1 that its Plasma Layer 2 scaling solution for Ethereum has gone online on mainnet, after three years of research and development. The Plasma solution scales the Ethereum blockchain to thousands of transactions per second (TPS), instead of the native 10-12 TPS rate. It also reduces the fees by an estimated 1/3rd, compared to before, all while maintaining Ethereum’s security. It does so by transferring the transactions processing outside the Ethereum mainnet, using it only for the final settlement. Further, it batches and groups the transaction, making the process more efficient, less resource intensive and thus cheaper.
You’ve been waiting for it, we’ve been waiting for it, and well, soon™️ is here! We present to you the OMG Network V1 Public Mainnet Beta 🚀 It is a fully trustless, low cost, high throughput way to transfer value at the same level of security as Ethereum. https://t.co/M8Qbk8s16N— OMG Network (@omgnetworkhq) June 1, 2020
The OMG network also released a demonstration web wallet and block explorer, to track and analyze the activity on the Plasma network. The new Layer 2 solution is fast, secured with watcher network and smart contract adjudicators, trustless, oriented for borderless financial services, instantly settled, low fees and enterprise grade.
“At OMG Network, we believe the ability to transfer value globally and without restriction is a https://cryptoticker.io/en/vitalik-ethereum-layer2/basic human right. The internet is now available to more than 60% of the world’s population, but our current financial system is wrought with friction. To empower true global commerce, we need to enable permissionless transactions that can accommodate multiple parties and forms of money. Blockchain already allows for this, but until now has been unable to scale to meet global demands. Finally, the OMG Network accomplishes all of this with the security of Ethereum and at a fraction of the cost. It is a major milestone in what will continue to be a long and exciting journey.” said Vansa Chatkavanij, OMG Network CEO
Bitfinex Tether (USDT) Integration With OMG Network
The Tether stablecoin is currently the largest bandwidth user on the Ethereum mainnet. Hence, to relieve congestion and offer fast low cost service, Bitfinex has integrated its Tether (USDT) product on the new Layer 2 solution. According to the official press release, the integration will resolve the scalability issues, lessen confirmation time and reduce transaction fees.
“At Bitfinex we are committed to improving our service to better support our customers. By migrating USDT value transfers to the OMG Network, we save costs, drive performance improvements, and relieve pressure on the root chain. This is good for Bitfinex, our users, and the entire Ethereum ecosystem. Transferring USDT as an ERC20 token costs a minimum miner fee of 0.001 Ethereum per transaction. OMG Network’s More Viable Plasma solution batches numerous transactions in one block and charges one predictable, low-cost fee. “This allows traders to react faster to trading opportunities and more efficiently arbitrage between exchanges as the network grows.” Paolo Ardoino, CTO at Bitfinex.
Black Friday Mar 13 Mass Crypto Sell-Off And Implications for Ethereum Scaling
On Mar 13, the price of Ethereum crashed from $240 to $110, liquidating huge positions and rapidly triggering stop losses. The fees skyrocketed and confirmation time went from sub 30 seconds to over 30 minutes, on normal fees scenarios. This caused significant delay for traders and investors, exiting their position or transferring ETH or other Ethereum based assets. The congestion on the network caused severe problems to the functioning and integrity of MakerDAO – the decentralized finance (DeFi) stablecoin project. The USDT integration with Plasma network will ensure that costly and bothersome events like this one, can’t occur again, by relieving network congestion and maintaining normal settlement latency.
“The OMG Network uses the More Viable Plasma (MoreVP) specification to increase the processing capacity of Ethereum MoreVP trustlessly scales Ether and ERC20 transactions by grouping them together and sending them through a set of Ethereum smart contracts. These grouped transactions are then verified and validated by a decentralized network of watchers. Processing batched transactions enables a high throughput of thousands of tps and results in 1/3rd the transaction cost for the end-user — all with Ethereum-level security.” said Kasima Tharnpipitchai, OMG Network CTO
About Layer 2 Scaling Solutions
The Layer 2 scaling solutions are decentralized protocols applied to increase the processing capacity of a blockchain (hence scaling) and as a result relieve congestion on the network. They work by delegating the network processing “off-chain” to their own chain, processing it there, before settling the final balances on the base layer mainnet.