Amid speculation that Tether, issuer of the most important stablecoin within the crypto market USDT, could launch its blockchain, the corporate’s CEO, Paolo Ardoino, has addressed the rumors with key details.
Tether Abandons Plans To Launch Own Blockchain
In an interview with Bloomberg News, Ardoino acknowledged Tether’s technological capabilities but noted that blockchains are rapidly becoming a “commodity” out there. Ardoino said
We’re superb in technology, but I believe blockchains will develop into almost a commodity in the long run. Launching a blockchain ourselves could be not the appropriate move. There are superb blockchains.
In response to Bloomberg, the stablecoin giant’s decision not to construct its blockchain network is notable, given Tether’s dominant position within the crypto market. With a market capitalization of $115 billion, USDT is probably the most widely used stablecoin and is a key on-ramp and off-ramp for crypto trading.
Nevertheless, Ardoino’s comments suggest that Tether prioritizes the safety and sustainability of its stablecoin over the potential advantages of getting a proprietary blockchain. “For us, blockchains are only transport layers,” he said.
The Dominance of The Big 5 Blockchains
The report further notes that the blockchain ecosystem is becoming increasingly diverse and competitive, with data from DeFiLlama showing that the highest five blockchain networks control roughly 86% of the full value locked (TVL) across 306 chains.
These are the BNB Smart Chain, Ethereum, Polygon, TRON and Avalanche, with a major amount of decentralized applications (Dapps) developed and contracts issued on the chains, in keeping with DappRadarr data.
Nevertheless, Ethereum, the leading blockchain by way of usage, accounts for $87.7 billion in total value locked out of $133.2 billion across all networks. Other blockchains, resembling TRON, which handles 49% of the USDT supply, have also established themselves as viable alternatives for Tether’s stablecoin.
In response to Angela Ang, senior policy adviser at blockchain intelligence firm TRM Labs, the business viability of those blockchains ultimately is dependent upon their ability to supply unique utilities, resembling speed, security, cost, or interoperability, that will not be already present within the ecosystem.
Tether’s decision to stay “blockchain agnostic” suggests the corporate’s deal with ensuring the widespread adoption and value of USDT slightly than tying its stablecoin to a selected blockchain network.
This approach aligns with Ardoino’s view that blockchains are increasingly becoming commoditized and that Tether’s priority is providing a reliable and secure stablecoin that seamlessly integrates with various blockchain platforms.
On the time of writing, the full crypto market capitalization has jumped to $2.135 trillion from Friday’s opening value of $2.09 trillion in response to the recent speech by Federal Reserve Chairman Jerome Powell, who hinted at further rate of interest cuts.
Featured image from DALL-E, chart from TradingView.com