Tether, or USDT, has launched on Polygon. It’s the largest stablecoin in market cap, with over $73 billion. Thether brings stability to the Polygon DeFi ecosystem. This will now be less affected by potential market volatility.
This is good news for L2 solution Polygon. Currently, Polygon has over 8,000 teams that build on its platform. So, without further ado, let’s have a look at what Tether (USDT) brings to the table.
Tether Token (USD₮) Launches on Polygon
— Tether (@Tether_to) May 27, 2022
Tether Making the Rounds
Polygon is now the 11th blockchain that supports Tether (USDT). Other blockchains include Ethereum, Solana, Algorand, and Tron. We will get back to Tron, and its relationship to USDT, later.
Polygon is a Layer 2 solution that runs on Ethereum. Layer 2 solutions, in general, solve some of the most urgent Ethereum problems. For example, they have low gas fees and a fast transaction speed. Among others, this makes them ideal for blockchain games.
Currently, Polygon has no less than 19,000 dApps running on its platform. In October 2021, this number was just 3,000 dApps. That’s a stunning 500% increase for Polygon.
This is partly due to Alchemy, a blockchain start-up. They work in a quiet fashion behind the scenes. Their focus is to fix blockchain infrastructure issues. For example, by replacing nodes with a faster architecture. It makes the nodes also more scalable and decentralized. In other words, they take care of the back end. This allows developers to concentrate on their dApps. The picture below shows the increase in active developers on polygon.
Source: Polygon blog
What Is a Tether?
Tether has been around since 2014. Currently, they offer five different tokens. All these tokens peg 1:1 with a corresponding fiat currency. Each token is also 100% backed by Tether’s reserves. So, let’s have a look at these five tokens.
- USDT — This is the world’s largest stablecoin by market cap. The market cap is $72.5 billion. It pegs to the USD.
- EURT — This coin pegs to the euro. Its market cap is 241 million euro.
- CNHT — This coin pegs to the Yuan. The market cap is 20.5 million Yuan.
- XAUT — Tether Gold, this is the world’s leading gold token. One XAUT represents one fine troy ounce of gold on a London Good Delivery (LBMA) gold bar. Tether backs this token by physical gold. Its market cap is ℥246,524.33 (℥ is a unit for ounce).
- MXNT — This is a brand-new token, pegged to the Mexican Peso. The data of MXNT is not tracked yet by CoinGecko or CoinMarketCap.
Source: Tether website
What Will This Mean for Tron?
Tether deploys Tether (USDT) on the various blockchains. Almost 97% deploys on Tron and Ethereum. Respectively, with $38.7 billion on Tron and $36.8 billion on Ethereum. See the picture below. The red arrow is Tron and the green arrow is Ethereum.
Source: Polygon blog
It may come as a surprise to many that Tron has more Tether deployed on its chain. This is because it has cheaper transaction fees. Sending USDT between wallets on the Tron chain has a cost of around $1. Or rather, 1 USDT. That is the reason that, over recent time, Tron became a rather big chain. In other words, Tether (USDT) is a big part of Tron’s network.
If Polygon offers a lower fee compared to Tron, the latter might lose some business. This is an interesting development to follow. In the end, the retailers, or us, may benefit from this.
Current transaction fees on Polygon are around $0.01. However, it looks like the transaction fee will be similar to Tron and max out at $1. So, for the time being, it appears that this won’t impact Tron too much.
Tether (USDT) is now available on Polygon. This is the 11th blockchain Tether (USDT) operates on. Nonetheless, it will be interesting to see what market share Polygon will claim on USDT transfers. Currently, that is in the hands of Tron.
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