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About Tether Avalanche Bridged
Key Points
- Tether (USDT) is a stablecoin that mirrors the price of the U.S. dollar.
- Launched in 2014 by Brock Pierce, Reeve Collins, and Craig Sellars.
- USDT is pegged to the USD through reserves of commercial paper, fiduciary deposits, cash, reserve repo notes, and treasury bills.
- USDT is available on multiple blockchains, including Bitcoin, Ethereum, EOS, Tron, Algorand, and OMG.
- Tether’s unique feature is its guaranteed value, protected from crypto market volatility.
- USDT is
Introducing Tether Avalanche Bridged: A Revolutionary Leap in Digital Asset Connectivity
Unveiling Tether (USDT): A Stablecoin Pioneer
USDT, a stablecoin (stable-value cryptocurrency), is pegged to the U.S. dollar, issued by Tether, a Hong Kong-based company. The token’s parity with the USD is maintained by holding a reserve of commercial paper, fiduciary deposits, cash, reserve repo notes, and treasury bills, the value of which in USD is equivalent to the circulating supply of USDT.
Initially introduced in July 2014 as Realcoin, a second-layer cryptocurrency token constructed atop Bitcoin’s blockchain via the Omni platform, it subsequently underwent a series of rebranding efforts, ultimately adopting the moniker USDT. Beyond its initial Bitcoin-based iteration, USDT was later adapted to operate on the Ethereum, EOS, Tron, Algorand, and OMG blockchains, significantly expanding its interoperability.
The ostensible purpose of USDT is to synergistically merge the unfettered essence of cryptocurrencies, which enables seamless peer-to-peer transactions without the need for a trusted intermediary, with the stability and reliability inherent in the US dollar.
Stablecoins have gained traction as a hedge against inflation in recent times;
notably, lending them can yield returns ranging from 3% to as high as 20%,
a stark contrast to the meager 0.06% average interest rate offered by fiat
currency savings accounts. However, it is essential to acknowledge the
accompanying regulatory and platform risks, among other concerns.
The Visionaries Behind Tether: Unveiling the Founders
USDT, initially dubbed Realcoin, was introduced in 2014 by the triumvirate of Brock Pierce, Reeve Collins, and Craig Sellars.
Brock Pierce is a renowned entrepreneur, having co-founded a plethora of high-profile ventures in the realms of cryptocurrency and entertainment. Notably, in 2013, he co-established Blockchain Capital, a venture capital firm that had successfully raised over $80 million in funding by 2017. In 2014, Pierce assumed the role of director at the Bitcoin Foundation, a nonprofit organization dedicated to advancing and promoting the Bitcoin ecosystem. Furthermore, Pierce has also co-founded Block.one, the pioneering company behind EOS, one of the most prominent cryptocurrencies in the market.
Reeve Collins, a seasoned entrepreneur, helmed Tether as its CEO during its formative two years. His impressive repertoire includes co-founding several successful ventures, notably the online ad network Traffic Marketplace, entertainment studio RedLever, and gambling website Pala Interactive. As of 2020, Collins has taken the reins at SmarMedia Technologies, a cutting-edge marketing and advertising technology company.
Besides his involvement with Tether, Craig Sellars has been an integral part of the Omni Foundation for over six years, where he has contributed to the development of the Omni Protocol. This innovative protocol enables users to create and trade smart-contract-based properties and currencies on top of Bitcoin’s blockchain. Additionally, Sellars has accumulated a diverse portfolio of experience, having worked with several other prominent cryptocurrency companies and organizations, including Bitfinex, Factom, Synereo, and the MaidSafe Foundation.
The Unparalleled Characteristics of Tether
One of USDT’s distinguishing characteristics is its value stability, which is ensured by Tether’s guarantee to maintain a 1:1 parity with the U.S. dollar. As stated by Tether, the issuance of new USDT tokens is always accompanied by the allocation of an equivalent amount of USD to its reserves, thereby ensuring that each USDT is fully collateralized by cash and cash equivalents.
The notoriously mercurial nature of crypto markets is exemplified by the dramatic price swings of cryptocurrencies, which can experience 10-20% fluctuations within a single day, rendering them unreliable as a store of value. In stark contrast, USDT is shielded from these turbulent market oscillations.
This inherent property renders USDT a reliable sanctuary for crypto investors, allowing them to temporarily shelter their portfolios in Tether during periods of heightened market turbulence, thereby avoiding the need for a complete liquidation into USD. Furthermore, USDT facilitates seamless transactions of a U.S. dollar equivalent across regions, countries, and continents via blockchain, eliminating the necessity for a slow and costly intermediary, such as a bank or financial services provider.
Notwithstanding, a plethora of controversies has plagued Tether’s assertions regarding its USD reserves over the years, occasionally disrupting the USDT’s price trajectory, which plummeted to a historic low of $0.88. Moreover, numerous concerns have been voiced about the fact that Tether’s reserves have consistently evaded a comprehensive, independent third-party audit.
The Tether Controversy: Unraveling the FUD
Tether has been besieged by a plethora of FUD, largely due to its opaque balance sheet and the conspicuous absence of a public audit. The company has faced repeated fines for disseminating misleading statements regarding the state of its financial affairs. Following Tether’s initial disclosure of its balance breakdown, it has come under intensified scrutiny from regulators, who have cast doubt on its claims that all issued stablecoins are fully collateralized by dollar reserves.
Despite a report’s purported exoneration of Tether from any wrongdoing, skepticism persists. The company has been embroiled in recurring controversies surrounding its business practices, yet the prevailing sentiment within the crypto community is that Tether, in a sense, has become “too big to fail.”
Tether’s Foray into Social Media: A New Frontier?
In July 2022, Tether, in conjunction with Hypercore, a peer-to-peer data network, and its sister company Bitfinex, embarked on a collaborative venture to develop a social media application dubbed Keet.
A fully encrypted video chat application, presently available as a desktop-exclusive offering, is slated for expansion to mobile devices in the near future.
Notably, Keet app pioneers the deployment on Holepunch, a revolutionary platform empowering developers to craft Web3 applications. Moreover, despite Keet currently being a closed-source project, the companies envision transitioning it to open-source by year’s end.
When queried about the motivation behind Tether’s foray into the chat app arena, Ardoino, who also serves as the chief strategy officer at Holepunch, succinctly replied, “freedom of speech.”
The Circulating Supply of Tether (USDT): A Closer Look
There is no inherent cap on the total supply of USDT, as its issuance is theoretically bound only by Tether’s internal policies, given its status as a privately held company. Nevertheless, since Tether asserts that each USDT is fully backed by one U.S. dollar, the actual amount of tokens in circulation is effectively limited by the company’s tangible cash reserves.
Furthermore, Tether refrains from disclosing its issuance schedules in advance. Instead, the company opts for daily transparency reports, which provide a detailed breakdown of their asset reserves and liabilities, with the latter being equivalent to the total amount of USDT in circulation.
As of September 2020, the circulating supply of USDT tokens has surpassed 14.4 billion, collateralized by a staggering $14.6 billion in assets, as reported by Tether.
The Tether Network’s Security Mechanisms: A Robust Framework
Notably, USDT does not possess its own indigenous blockchain; rather, it functions as a second-layer token, operating atop the blockchain infrastructures of various cryptocurrencies, including Bitcoin, Ethereum, EOS, Tron, Algorand, Bitcoin Cash, and OMG, thereby leveraging the robust security afforded by their respective hashing algorithms.
Where to Acquire Tether (USDT): A Comprehensive Guide
It is feasible to acquire Tether (USDT) on a multitude of cryptocurrency exchanges. Notably, USDT’s average daily trading volume frequently rivals or even surpasses that of Bitcoin. Its prominence is particularly pronounced on exchanges where fiat-to-crypto trading pairs are absent, as it offers a viable surrogate for USD. The following are some of the most popular exchanges that facilitate Tether trading:
- Prominent cryptocurrency exchanges, including Binance, OKEx, HitBTC, and Huobi Global,
Tether Ventures into the Latin American Market
In May 2022, Tether unveiled MXNT, a novel stablecoin pegged to the Mexican peso, thereby marking its foray into the Latin American market. This strategic expansion followed the successful debuts of its USDT, EURT, and CNHT stablecoins, which are respectively anchored to the U.S. dollar, euro, and Chinese yuan.
Upon its inaugural launch, MXNT will be seamlessly integrated across three prominent blockchain ecosystems: Ethereum, Polygon, and Tron.
According to Paolo Ardoino, the firm’s CTO, the decision to venture into Latin America was driven by a significant surge in cryptocurrency adoption in the region. Notably, a report by Triple A, a cryptocurrency payments company, revealed that a substantial 40% of Mexican companies expressed interest in integrating cryptocurrencies in some form, with a remarkable 71% of this segment specifically focused on leveraging cryptocurrency usage.
Tether has identified Mexico as a prime location for the establishment of the next Latin American crypto hub. The strategy involves onboarding a substantial number of new users within the Latin American market, with the launch of MXNT serving as a pilot project for the introduction of future fiat-pegged currencies in the region.
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