Tether will launch its stablecoin USDT on Polkadot and Kusama

Users of Polkadot and Kusama will benefit from direct integration with Tether’s stablecoin USDT when the public interest parachain launches. On Tuesday, Tether announced that USDT will be launched on Polkadot and its sister network Kusama.

Tether is the oldest stablecoin to have achieved widespread adoption, with its circulating supply recently surpassing $40 billion. The company has recently committed to and carried out regular reserve audits, despite concerns raised over its reserve position in the past.

Data: Tether issued more than US$1.8 billion in USDT in March: On March 28, according to data from Stablecoin Printer, Tether issued more than US$1.8 billion in USDT in March. It is reported that since the beginning of this month, Tether has been issuing a large amount of USDT to meet the conversion needs of cryptocurrency traders. In the past four days, Tether has issued more than 1.1 billion USDT. [2022/3/28 14:22:50]

The timing of Tether's launch on Polkadot depends on its roadmap and the activation of parachains ("shards" in the Polkadot network). As Tether CTO Paolo Ardoino told Cointelegraph:

Tether has reached a cooperation with the DeFi lending agreement Aave: Jinse Finance reported that Tether announced that it has reached a cooperation with the open source, non-custodial DeFi lending agreement Aave. Both parties will work together to bring about wider adoption of Tether (USDt) as a financial instrument for the nascent Defi ecosystem. According to Aave, Tether offers lenders on the platform yields as high as 12.25% per month, compared with 8% and 5.7% for other stablecoins such as DAI and USDC, respectively. [2020/3/10]

“Tether will likely launch on StateMint, the first available parachain. We expect StateMint to be the first public interest parachain.”

Analysis | 3 scenarios where Tether leaves the crypto market important. Tether is probably one of the most important and largest entities in the cryptocurrency ecosystem, with a market share of over $4 billion. In the stablecoin ecosystem (GUSD, TUSD, USDC, PAX), Tether has a market share as high as 83%. In addition, according to data from Coinlib.io, from the perspective of Tether’s traffic in the market, more than 50% of Tether’s trading volume ($2 billion) is used to trade Bitcoin. So what would happen if Tether left the crypto market? AMBcrypto summarizes the following hypothetical scenarios: 1. Panic spreads to the market; 2. The sudden end of the largest liquidity provider; 3. Speculative opportunities for Bitcoin. [2019/10/10]

Public interest parachains are a recent proposal from the Polkadot network that provide a neutral foundation upon which key features of the entire network are built. Most “normal” parachains are launched by outside developers, and sometimes they may overlap in functionality, becoming effective competitors.

Building on public interest parachains means that USDT remains neutral within the wider network, while its tokens are available in any other parachain thanks to Polkadot's cross-shard communication framework.

Tether will be launched on Kusama before being deployed on Polkadot, and Kusama itself will launch the parachain at least a few weeks before Polkadot. Kusama is Polkadot's "canary network," which sits between a testnet and an independent blockchain. Kusama is a fully functional network with economic value, but it is poised to lead the way in implementing new protocol upgrades.

With Polkadot and Kusama joining Tether’s considerable adopters, Tether becomes one of the stablecoins with the broadest reach on the blockchain. Blockchain networks using Tether include Bitcoin (BTC), Ethereum (ETH), Tron (TRX), EOS, Solana (SOL) and Bitcoin Cash (BCH). Tether also supports many second layer solutions such as zkRollups and Liquid Network. Ardoino added that the decision to launch Tether on Polkadot was clearly based on DeFi considerations:

“Our integration with Polkadot is designed to support a growing decentralized finance ecosystem across blockchains. Web 3 technologies have advanced significantly and we look forward to helping them unlock the web of value.”

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