[Part 1] Hegemony of Stablecoins: Global Stablecoin Dominance and US Regulatory Reforms
[Part 2] Hegemony of Stablecoins: KRW Stablecoins at the Crossroads of Innovation and Regulation
[Part 3] Hegemony of Stablecoins: Ethereum’s 'Meta Transactions' as the Key to Cost Innovation
[Part 4] Hegemony of Stablecoins: The Future of Finance Lies in Cars and AI
[Part 5] Hegemony of Stablecoins: Why is South Korea Considering Issuing Won-Based Stablecoins?
Amid the intensifying global competition in stablecoins, the transaction costs associated with Ethereum-based USDT and similar mainstays have become a major concern. High gas fees on the Ethereum network, which are essential for transferring stablecoins like USDT, are increasingly viewed as fundamental obstacles to expanding the ecosystem. Currently, Ethereum’s gas fees are divided into "base fee" and "tip," akin to a fare and a priority surcharge in ride-hailing services. Sending over $50 worth of USDT, for instance, often incurs gas costs exceeding one dollar, prompting users to rely on credit cards for transactions instead.
In this context, Professor Hyoung-Joong Kim, Head of Cryptocurrency Research Center at Kookmin University, states that “the high gas costs on the Ethereum network are the primary barriers to mainstream global payment adoption.” He emphasizes that “by leveraging recent advancements in meta transaction technology, we can substantially lower, or even eliminate, these costs.” He further notes that “this technology, which adopts a payee-bearer approach in transaction fees, can dramatically improve user experience and significantly increase adoption rates.”
The advantages of meta transactions extend beyond mere cost reduction. Several blockchain networks are already implementing ‘free transactions’ or ‘zero-Gas’ services, which allow users to make payments without paying separate transaction fees. Essentially, platforms or service providers absorb the transaction costs, allowing users to enjoy seamless payments, much like shopping without worrying about transaction fees at a retail store. Consequently, from a user standpoint, paying for a product and paying the associated network fee become separate experiences, with the latter handled behind the scenes.
Professor Hyoung-Joong Kim explains, “Introducing meta transaction technology into Ethereum can effectively address the high-cost issue while preserving Ethereum’s security and decentralization.” He envisions that “if major brands like Starbucks adopt this technology, customers could pay with USDT without worrying about transaction fees, experiencing almost fee-free payments.”
Furthermore, rising network costs act as a catalyst for technological innovation. Blockchain platforms such as TRON and Solana already enable near-zero-cost transactions, and the competitive landscape is spurring ongoing development of cost-saving solutions in Ethereum. These advancements aim to mitigate the fee burden for users and promote more accessible blockchain payments.
Professor Kim emphasizes that “with the combined efforts of technological advancement and supportive policies, a low-cost, highly efficient payment environment will likely become a reality soon.” He reiterates that “the key to this future lies in the active adoption of innovations like meta transactions.” Ultimately, solving the cost challenge is fundamental to securing the future competitiveness of the blockchain ecosystem.
You can find the Korean version of this article here.
