The digital currency OMG recently rose from the price of $1.88 to $6.55, and also reached a high of $9.57 on August 22, which means a weekly investment return of 222.89%

OMG coin is among the top 50 cryptocurrencies by total market capitalization coinmarketcap But it wasn’t very popular until recent days when it came to light after its price doubled.

Below we will discuss the reasons for the rise of the OMG cryptocurrency?

What is OMG Network?

Before looking at the reasons for the rise of OMG coin, let’s first look at the OMG project.

The OMG Network (formerly known as OmiseGO) is a project based on scaling and researching second layer scaling solutions for the Ethereum blockchain.

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The scaling solution itself is called plasma.

Therefore, the OMG Network is a decentralized, low-fee, high-throughput blockchain that works in tandem with the Ethereum mainnet and can help increase the capacity of Ethereum blockchain transactions and relieve congestion.

OMG Network announced the launch of the “Plasma V1 mainnet beta” on the first of last June.

Plasma solution scales the Ethereum blockchain to thousands of transactions per second (TPS) versus the normal 12-15 TPS rate.

The proposed solution from OMG also reduces fees by an estimated 1/3, while maintaining the same level of security.

OMG does this by processing transactions outside the main Ethereum network.

Only the Ethereum mainnet itself is used for the final settlement.

In addition, OMG aggregates and orchestrates transactions, which makes the process more efficient, less resource intensive, and thus cheaper.

Tether joins the OMG network:

Tether (USDT) has always been the largest stablecoin on all blockchains and mainly the Ethereum network, given that the Tether stablecoin has deep influence and high liquidity across all trading platforms.

The total market capitalization of Tether has exceeded $10 billion, which is why Tether transfers and transactions on the Ethereum mainnet have long been among the top three gas users.

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Tether partnered with Plasma Network OMG on the day the update was released on June 1.

Where Tether realized the usefulness and potential of the proposed solution.

On August 17, it was announced that Tether had completed its merger on the OMG Network.

According For the press release:

Users will be able to withdraw and deposit USDT into Bitfinex via the OMG network.

Why did the price of OMG coin rise?

The high price of the OMG cryptocurrency can be attributed to the entry of the largest and most liquid stablecoin on its network.

The current very high fees on the Ethereum blockchain may also be a contributing factor, as diverting traffic to the OMG network will help mitigate the problem.

Due to the use of Tether on the OMG network, the use of OMG is set to increase significantly in the coming days.

Although it is possible that the initial rise in OMG coin prices was caused by users’ speculation of the coin’s increased interest and more use.

There is also another reason for the rise of the OMG coin, as it is expected that the OMG blockchain will contribute to facilitating the deposit and withdrawal of Tether coins from the trading platforms in a short time and with lower fees.

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Second layer scaling solutions:

Layer 2 scaling solutions are decentralized protocols that are implemented to increase the processing capacity of the blockchain and thus reduce congestion on the network.

Where the main network transactions are delegated “off the network” and processed there and then the end balances are settled on the main network.

Read also:

Tether is officially launched on the OMG blockchain

How does Tether (USDT) affect the price of Bitcoin?