Hermez, a layer-two scaling solution on the Ethereum blockchain, has announced its first crypto partnership as it sets its sight on making Tether transfers much cheaper.

Hermez is a layer-two technology that utilizes ZK-Rollups. The rollups are a layer-two solution that improves scalability in the Ethereum blockchain.

They batch hundreds of transactions into one, freeing up more data and reducing gas fees for transaction validation. They also use zero-knowledge proofs, a cryptography technique, to run off-chain computations and submit validity proof to the Ethereum network.

The pairing between Tether and Hermez appears to be a perfect one. Data from ETH Gas Station shows that Tether stablecoin-denominated transactions account for a significant portion of activities on the Ethereum network.

By improving scalability, Hermez could free up more space on the Ethereum network and help combat rising gas fees.

The Ethereum network has had a significant problem with rising gas fees of late, thanks in no small part to the growth in the decentralized finance (DeFi) space. With most DeFi protocols operating on the blockchain, gas fees on the network have also skyrocketed.

Last week, the average gas fees on the network reached an all-time high, topping out at $17.43 per transaction, according to data from YCharts. The figure represented a considerable jump from the previous all-time high – $12.54, which was recorded back in September during the DeFi mania’s height.

Thanks to yield-chasing on several DeFi platforms, stablecoin transfers increased significantly, increasing usage on the Ethereum network. The average gas fees went through the roof. Sadly, this also occurred to the detriment of several market participants.

Aavegotchi, a non-fungible token (NFT) project, announced around that time that it would postpone its mainnet launch. Aavegotchi blamed the delay on the rising gas fees, explaining that it was considering using layer-two technology to facilitate the mainnet’s release.

In part, the company’s post explained that its project on layer-two would improve speed and scalability while reducing transaction fees. All in all, it could enhance the gaming experience a great deal.

So far, layer-two technology provides perhaps the most significant reason for solving expensive gas fees. Many have pointed to the launch of Ethereum 2.0, the long-awaited upgrade that transforms the Ethereum network into a proof-of-stake consensus.

However, while the upgrade has begun, Kosala Hemachandra, the founder of MyEtherWallet, recently told news sources that the process might take years to complete.

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