Tether Issues “New Stablecoin”
Today (January 17), Tether announced the initial deployment of its new token USDT0 on Kraken’s Ethereum scaling network Ink, aiming to develop a cross-chain liquidity layer utilizing LayerZero’s Omnichain Fungible Token Standard. This initiative seeks to simplify the cross-chain transfer of USDT, providing a seamless experience for users and developers.
As Tether’s previously launched stablecoin, USDT has become the world’s largest single stable asset. However, the liquidity of stablecoins is currently fragmented, as USDT cannot flow across different chains, and high cross-chain costs have deterred ordinary investors.
The launch of USDT0 is designed to address this issue. On one hand, the collaboration with LayerZero significantly enhances the security of cross-chain transactions; on the other hand, it achieves zero friction in cross-chain transfers (examples are provided below), further expanding the business scope of USDT and enhancing its utility on the blockchain.
Tether’s CEO Paolo Ardoino stated, “USDT0 brings an essential solution for the smooth flow of USDT across different ecosystems. It aligns with Tether’s overall vision by enhancing interoperability and reducing barriers, optimizing the user experience. It’s truly exciting to see such innovation emerge that can effectively meet market demand.”
Significantly Reducing Cross-Chain Costs
USDT has always had interoperability, but its approach has been fragmented. Each blockchain has its own USDT, and transferring USDT between different chains relies on solutions like cross-chain bridges, which involve destroying USDT on one chain and minting it on another.
With USDT0, the situation is different: USDT now becomes a single, liquid asset across various blockchains, no longer fragmented. Specifically, the same token can be smoothly transferred between different networks.
For users, USDT0 eliminates fragmentation, meaning higher capital efficiency. Below is an example of transferring 10,000 USDT from Ethereum to Avalanche (left), compared to using the LayerZero-enabled USDT0 (right). It is evident that with USDT0, users can transfer exactly what they want across chains, greatly reducing expensive transaction fee losses.
ps-s65454
Expansion Plans
Ink: The Gateway to Institutional Liquidity
USDT0 will initially launch on Ink, one of the world’s largest and most trusted cryptocurrency exchanges, Kraken’s L2 blockchain. Leveraging the world’s largest stablecoin, USDT0 creates a seamless channel for liquidity between institutions.
Andrew Koller, founder of Ink, stated, “Both USDT0 and Ink are dedicated to ensuring that users and developers can maximize control over their assets while seamlessly accessing various opportunities. The choice of Ink as the launch chain for USDT0 will set a new standard for liquidity flow of stablecoins across all chains in the future.”
Additionally, USDT0 has been integrated with Kraken, allowing users to deposit and withdraw USDT0 on Ink. More integrations are also planned within the Kraken tech stack, which will set standards for the interoperability of USDT0 and pave the way for a world-class experience for USDT users.
First Round of Collaborations and Expansions: Berachain and MegaETH
Following Ink, the first round of partnership for USDT expansion via USDT0 includes Berachain and MegaETH, with more relevant announcements to be made in the coming weeks.
Berachain is an L1 blockchain fully compatible with the Ethereum Virtual Machine (EVM), built on an innovative Proof of Liquidity (PoL) consensus mechanism. This mechanism rewards users who actively contribute resources to the network with the native governance token $BGT.
The integration of USDT0 on Berachain will launch on the Boyco platform, which aims to directly channel funds into the core applications on Berachain. Boyco consists of 11 decentralized applications and 15 asset issuers (including USDT0), making it an ideal channel for on-chain reserves seeking yield on Berachain. Boyco’s pre-deposit vault has already attracted over $1.5 billion in deposits, and this number is expected to significantly increase with the official project launch and the inclusion of high-utility assets like USDT0.
MegaETH is the first real-time blockchain capable of achieving 100,000 transactions per second with block times of under 10 milliseconds while inheriting Ethereum’s security. MegaETH looks forward to utilizing USDT0 across a wide range of DeFi applications and payment products. Combining real-time applications with Tether’s distribution capabilities will accelerate the next wave of cryptocurrency adoption.
Overall, USDT is the world’s largest stablecoin and the most sought-after on-chain asset for users and the blockchain itself, while USDT0 serves as a scalability solution for USDT, optimizing the currently high cross-chain costs, making both USDT and the entire cryptocurrency ecosystem more user-friendly.
This article is collaboratively reproduced from: Deep Tide