A major blockchain event occurred on November 6 when Tether, the USDT stablecoin issuer, minted $2 billion worth of USDT on Ethereum. This was not the supply increase in USDT, but it was a chain swap program that exchanged assets between the blockchains. Tether confirmed this information by explaining that the total USDT supply has not changed.
Background on the Chain Swap Initiative
A chain swap allows for token exchange to improve the flow, availability, and value of assets for the users. Tether often uses chain swaps to keep balance across many blockchains without affecting the amount of tokens. Here, Tether acts in collaboration with a third-party exchange that is used to transfer some USDT from various blockchains to Ethereum.
Breakdown of Transfers Across Networks
According to Tether’s breakdown, the transfers involved multiple blockchain networks (in USDT):
- TRC20 (Tron Network): 1 billion
- Avalanche (AVAX): 600 million
- NEAR Protocol: 300 million
- Celo Network: 75 million
- EOS Network: 60 million
These tokens are being exchanged for Ethereum for improved liquidity in this network, which remains preferred for DeFi and institutional platforms.
Supply and Market Impact
Interestingly, even though the stablecoin was trading in a large volume, Tether’s management assured the investors that nothing would change and the circulating supply of USDT would remain the same. The tokens minted on Ethereum were not new supply in the market; they were moved to Ethereum from other blockchains.
This swap is a testament to Tether’s constant efforts to ensure decentralization across various ecosystems; this might increase customer transaction throughput and cope with the demand in the network.
Final Thought On this USDT Mint
The $2 billion mint on Ethereum is a perfect example of how Tether is always looking for and actively addressing the availability of cash on various blockchains. In this case, Tether can increase or decrease the number of tokens in circulation, thus maintaining the total supply while being capable of adapting to changes in the blockchain markets. This chain swap demonstrates that Tether remains flexible in its operations as it acts as the pillar of liquidity for the effective working of the cryptocurrency market.
