Tether Provides Clarification On $2 Billion USDT Mint

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Tether’s CEO, Paolo Ardoino, recently commented on the latest on-chain data provided by Whale Alert. According to the data, the Tether Treasury added a total of 2 billion USDT newly minted on Ethereum in a single transaction.

As a seasoned researcher with a focus on digital assets and blockchain technology, my interest in this recent development involving Tether is piqued. The fact that the Tether CEO, Paolo Ardoino, has taken the time to clarify the situation suggests a level of transparency that is commendable.

In other words, Ardoino made it clear that the alert was held up and pointed to a recent post on X. The post detailed that the company had collaborated with a well-known third-party exchange for a chain swap operation. This process entailed transferring portions of their USDT cold wallets from multiple blockchains into USDT on Ethereum.

Tether CEO Explains Recent USDT Minting on Ethereum

According to Paolo Ardoino, CEO of Tether, he recently commented on the recent data from Whale Alert which indicated that the Tether Treasury had created and transferred 2 billion USDT onto the Ethereum blockchain in one transaction. He clarified that the announcement was slightly delayed and highlighted that this transaction was part of a broader plan or strategy.

According to Ardoino’s latest update, there was a recent post on X that detailed the collaboration between the company and a well-known third-party exchange for a chain swap operation. This operation entailed moving a portion of the company’s cold wallet assets from different blockchains over to Ethereum.

Very very delayed notification.
Context:

— Paolo Ardoino (@paoloardoino) November 6, 2024

The business plans to withdraw USDT from multiple underused blockchains and transfer it to Ethereum by making large transactions between wallets. This action is a step towards consolidating these tokens, aiming to exchange them back to the Ethereum network. The goal is to enhance asset management and boost liquidity.

To prevent market ambiguity, Ardoino announced that these token transfers would take place and emphasized the routine aspect of the alteration within standard issuance procedures. This main issuer’s consolidation plan primarily involves adapting to fluctuating user requirements and channeling resources towards areas with the highest token activity. Lately, the company disclosed a group net profit of $2.5 billion during the third quarter of this year. Additionally, the stablecoin issuer has also reported a profit of $7.7 billion over the first nine months of this year.

Swapping USDT Across Different Blockchains

Tether plans to start a major exchange migration, moving some of its reserve assets from various blockchains like TRON (TRC20), Avalanche (AVAX), Near Protocol (NEAR), Celo (CELO), and EOS, over to Ethereum. This means exchanging the tokens stored in their cold wallets on these platforms into Ethereum-backed USD Tether (USDT).

A chain swap refers to a method where digital currencies are moved from one blockchain platform to another. This process allows traders to utilize their cryptocurrencies across multiple blockchain networks that acknowledge the specific digital asset they own, effectively expanding its usability.

Here’s one way to rephrase the given text:

As an analyst, I can confirm that the total issuance of USDT by Tether remains unchanged. However, due to escalating market demand for the Ethereum-based token, there is a shift in its balance across various networks, with more USDT being allocated towards Ethereum networks.

The article states that approximately one billion dollars worth of USDT tokens were moved from TRC20, along with 600 million from the Avalanche network, 300 million from NEAR, 75 million from Celo, and 60 million from EOS in a series of swaps.

This action forms part of the company’s wider approach to ensure accessibility of USD within the blockchain networks where the demand is strongest. Regularly, it executes swaps between chains to improve user convenience and adaptability, without altering the overall supply across all systems.

The Dominance Continues Despite Supply Reduction

As a crypto investor, I’ve noticed that the token supply has shrunk from 120.7 billion to 120.4 billion, making it still the leading source of liquidity in the market. During normal trading activities, about 85% of the total available USD supply gets utilized. The remaining portion unfortunately becomes inactive.

In just a single day, the surge in Bitcoin‘s (BTC) value to unprecedented peaks pushed the trading volume of Tether (USDT) past $160 billion. Remarkably, this amount represents an astounding 132% of USDT’s total circulating supply.

That was a significantly more significant spike in turnover compared with USDC, which recorded just 47% of its market cap in volume-though it did grow on chains like Base. However, USDC has not entirely usurped the top position that USDT enjoys in every use case.

2024 saw a significant expansion of stablecoins alongside a surging Bitcoin market, which appears to have facilitated substantial profits for issuers like Tether. Despite some apprehensions regarding its reserve holdings, it continues to maintain an overcollateralization with traditional and similar asset types, thus solidifying its dominant position in the cryptocurrency sector.

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2024-11-07 01:44