Altcoins

Tether Froze For Hours While Crypto Prices Fell, Now Resolved

from Trust Nodes 5 years ago 0 0 658

Tether’s Omni Layer was apparently facing some problems at around 9PM London time on September 17th. They said:

“We are experiencing an issue with the parsing engine that feeds data to Omniexplorer and Omniwallet. It is being investigated…

We have identified the issue with a backend client used by our parsing engine that appears to have locked up/become non responsive. We have restarted all applicable processes and are monitoring them while they verify & resync. This process should take ~2-3 hours to complete…

The data verification and resync process is still underway but is taking longer than originally expected. Updated eta is now estimated to be around 03:00 UTC Sep 18.”

The re-sync took longer than expected, with Omni, and thus Tether, back on operation at 5AM London time today, September 18th, when they said:

“Data verification and resync is now complete. Omni Explorer and all tx information is synced up to current block height. Omniwallet address balances are also current and users can safely resume normal wallet operations.”

For eight hours, therefore, Omni told Tether users and others that they “would recommend waiting until all process are fully restored to normal service,” before transacting.

Some suggest this had an effect on crypto prices, with the featured image above showing that straight blue line during which Binance’s Tether balances remained unchanged.

Crypto prices however began falling at about 11AM on Tuesday, that being about ten hours before problems with Omni were announced, so if there is any causation relationship is unclear.

As you probably know, Tether is a centralized dollar token whereby analogue fiat is represented in a USDT token form on the Omni Layer.

Omni is a second layer of sorts running on top of bitcoin, with something seemingly going wrong at their back-end, suggesting Omni too is potentially centralized.

That means users may need to trust not only Tether itself, but also the Omni protocol upon which it is running as apparently that protocol can simply freeze.

There are many alternatives to Tether now however. One of them is the Gemini Dollar, which is regulated and runs on the trustless and decentralized ethereum blockchain. Another one is natively digital DAI dollars which all runs algorithmically.