Tether Issues “New Stablecoin”
Today (January 17), Tether announced the launch of its new token USDT0, deployed for the first time on Kraken’s Ethereum expansion network, Ink. This initiative aims to leverage LayerZero’s Omnichain Fungible Token Standard to develop a cross-chain liquidity layer, simplifying the cross-chain transfer of USDT and providing a seamless experience for users and developers.
As Tether’s previously launched stablecoin, USDT has become the largest single stable asset globally. However, the liquidity of stablecoins is currently fragmented, as USDT on different chains cannot interoperate, and the high costs of cross-chain transactions have deterred ordinary investors.
The introduction of USDT0 addresses this issue by significantly enhancing the security of cross-chain transactions in collaboration with LayerZero, while also achieving zero friction in cross-chain transfers (as exemplified below). This expands the business scope of USDT and enhances its utility across blockchains.
Tether’s CEO, Paolo Ardoino, stated, “USDT0 provides a much-needed solution for the smooth circulation of USDT across different ecosystems. By enhancing interoperability and reducing barriers, it aligns with Tether’s overall vision and optimizes user experience. It is genuinely exciting to see such innovation emerge that effectively meets market demand.”
Significantly Reducing Cross-Chain Costs
USDT has always possessed interoperability, but its implementation has been somewhat fragmented. Each blockchain has its own version of USDT, and transferring USDT between different chains typically relies on cross-chain bridges, which involve destroying USDT on one chain and minting it on another.
With USDT0, the situation changes: USDT now becomes a singular, liquid asset across various blockchains, eliminating fragmentation. Specifically, the same token can be smoothly transferred across different networks.
For users, USDT0 eliminates fragmentation, translating to higher capital efficiency. The following is an example of transferring 10,000 USDT from Ethereum to Avalanche (left), and now using USDT0 powered by LayerZero (right). It is evident that with USDT0, users can transfer exactly what they send across chains, greatly reducing the loss from expensive transaction fees.
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Expansion Plans
Ink: The Gateway to Institutional Liquidity
USDT0 will first be launched on Ink, a Layer 2 blockchain introduced by Kraken, one of the world’s largest and most trusted cryptocurrency exchanges. Leveraging the world’s largest stablecoin, USDT0 builds a seamless channel for liquidity among institutions.
Andrew Koller, founder of Ink, stated, “USDT0 and Ink both strive to ensure that users and developers can have maximum control over their assets and access various opportunities as seamlessly as possible. The choice of Ink as the launch chain for USDT0 will set a new standard for stablecoin liquidity across all chains.”
Moreover, USDT0 has been integrated with Kraken, allowing users to deposit and withdraw USDT0 on Ink. There are plans for further integrations 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 Partnerships and Expansion: Berachain and MegaETH
Following Ink, the first round of partners for USDT expansion through USDT0 includes Berachain and MegaETH, with more related announcements expected in the coming weeks.
Berachain is a Layer 1 blockchain fully compatible with the Ethereum Virtual Machine (EVM), built upon 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 core applications on Berachain. Boyco consists of 11 decentralized applications and 15 asset issuers (including USDT0), making it an ideal avenue for reserving yield-seeking funds upon Berachain’s launch. Boyco’s pre-funding pool has already attracted over $1.5 billion in deposits, and this number is expected to grow significantly with the launch of official projects and the addition of high-utility assets like USDT0.
MegaETH is the first real-time blockchain capable of processing 100,000 transactions per second with block times of under 10 milliseconds, while inheriting Ethereum’s security. MegaETH looks forward to leveraging USDT0 across a wide range of DeFi applications and payment products. The combination of instant applications with Tether’s distribution capabilities will accelerate the next wave of cryptocurrency adoption.
Overall, USDT is the world’s largest stablecoin and the on-chain asset most sought after by users and the blockchain itself, while USDT0 serves as a scalability solution for USDT, optimizing the historically high cross-chain costs and making USDT and the entire cryptocurrency ecosystem more user-friendly.
This article is collaboratively reproduced from: Deep Tide.