Tether Issues New Stablecoin
Today (January 17), Tether announced the first deployment of its new token USDT0 on Kraken’s Ethereum scaling network, Ink. This initiative aims to leverage LayerZero’s Omnichain Fungible Token Standard to develop a cross-chain liquidity layer, simplifying cross-chain transfers of USDT and providing a seamless experience for users and developers.
As a previously launched stablecoin by Tether, USDT has become the world’s largest single stable asset. However, the liquidity of stablecoins is currently fragmented, as USDT on different chains cannot interchange fluidly, and high cross-chain costs have deterred ordinary investors.
The launch of USDT0 is designed to address this issue by significantly enhancing the security of cross-chain transactions in collaboration with LayerZero, while also achieving zero friction for cross-chain transfers (examples are provided below). This further expands the business scope of USDT and enhances its utility on blockchain.
Tether’s CEO, Paolo Ardoino, stated: “USDT0 brings a much-needed solution for the smooth flow of USDT across different ecosystems. By enhancing interoperability and reducing barriers, it aligns with Tether’s overall vision and optimizes the user experience. It is truly exciting to see such innovations emerge, effectively addressing market demands.”
Significantly Reducing Cross-Chain Costs
USDT has always had interoperability, but its implementation has been rather fragmented. Each blockchain has its own USDT, and transferring USDT between different chains relies on solutions such as cross-chain bridges, which involve burning USDT on one chain and minting it on another.
With USDT0, the situation changes: 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 issues, signifying 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 wish across chains, greatly reducing costly fee losses.
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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 largest and most trusted cryptocurrency exchanges in the world. Leveraging the world’s largest stablecoin, USDT0 builds a seamless channel for liquidity between institutions.
Andrew Koller, founder of Ink, stated: “Both USDT0 and Ink are committed to ensuring users and developers have maximum control over their assets and can 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. Further integrations are 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 Partnerships and Expansion: Berachain and MegaETH
Following Ink, the first round of partners for expanding USDT via 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 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 funnel funds into core applications on Berachain. Boyco consists of 11 decentralized applications and 15 asset issuers (including USDT0), making it an ideal channel for securing yield-seeking funds on Berachain. Boyco’s pre-deposit vault has already attracted over $1.5 billion in deposits, and this figure 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 anticipates leveraging USDT0 across a wide range of DeFi applications and payment products. Combining instant applications with Tether’s distribution capabilities will accelerate the next wave of cryptocurrency adoption.
In summary, USDT is the world’s largest stablecoin and the most sought-after on-chain asset for users and the blockchain itself. USDT0 is a scaling solution for USDT, optimizing the issue of high cross-chain costs, making USDT and the entire cryptocurrency ecosystem more user-friendly.
This article is collaboratively reproduced from: Deep Tide.