Why the Same Stablecoin Costs Different Amounts on Different Chains
One token, several networks, and a transfer cost that varies by a factor of a hundred. What the chain actually changes.
Felix Oduya · ·2 min read
The same stablecoin exists on several networks at once. It is the same promise from the same issuer, but moving it costs wildly different amounts depending on which one you use.
The postal analogy
Imagine the same letter sent by courier, by first class post and by surface mail. The letter is identical. The price and the arrival time are not, and the choice is yours at the moment of sending.
A stablecoin network is that choice, made at the moment you press withdraw.
What is actually different
The network charges a fee to process the transfer, and that fee has nothing to do with the stablecoin or its issuer. It is paid to whoever runs the network, in that network’s own currency, and it moves with how busy the network is.
A transfer costing a few cents on one network can cost several dollars on another at the same moment, for the same amount of the same token.
Why the issuer allows this
Because users want it. An issuer that existed on one network only would be unusable wherever that network was congested or expensive.
Each version is backed by the same reserve. The issuer tracks how many exist on each network and the total is what matters.
The mistake this creates
Sending to an address on the wrong network. The address may look valid, the transfer may complete, and the funds arrive somewhere the recipient cannot reach.
Recovery is sometimes possible through the receiving venue and sometimes not. This is the single most common way people lose stablecoins, and it has nothing to do with the stablecoin.
How to avoid it
Confirm the network on both ends before sending, every time, in writing. The sender chooses and the receiver must be able to accept that choice.
A platform that supports more than one stablecoin network will state which ones it accepts for deposits, and that list is the one that governs.
Choosing a network for a real payment
Three questions. What does the transfer cost. How long does it take to confirm. Can the recipient receive on it.
The third overrides the first two. A transfer that is free and unreachable is worth nothing, which is why exchanges that state which chain they settle on are easier to pay and to be paid by. For anything recurring, agree the network once with Collect & Exchange or whoever sits on the other side, and then stop choosing it per payment.
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