Comment
Author: Admin | 2025-04-27
Tether, or a stablecoin exclusive to one blockchain?What Does Tether Do?Tether is a stablecoin designed to mitigate crypto market volatility by pegging its value to the US dollar. It serves as a link between cryptocurrencies and traditional fiat by being a static, reliable, digital store of value. Another important role of stablecoins is to prevent value loss in the time from when a transaction is initiated to when it is executed, a situation referred to as slippage.Without a static currency, there would be no way to ensure loan or liquidity providers that the currency they provide would be worth the same value when the loan is repaid. It would also be impractical for service providers to constantly update pricing information if the underlying currency price kept shifting.Why Did Tether Depeg?When Tether FUD is in full flow, it has depegged from the dollar several times in the past, both up and down, depending on which exchange you look at and opening and closing prices. Here is a brief history of the most significant USDT depegs, and the reasons behind them:How Do Tether Tokens Work?Stablecoins like Tether are crypto assets that are pegged 1:1 to fiat currencies like the US Dollar or Euro, and backed by real-world assets in full by their issuing company. These reserves must be frequently attested or audited, depending on their jurisdiction, to ensure all stablecoins issued are fully collateralized and redeemable at all times.Tether ensures that USDT is available on almost all ecosystem chains as native tokens (such as Bitcoin’s OMNI layer, Ethereum’s ERC20 standard, BNB Chain’s BEP20, Tron’s TRC20 etc) to maintain the stablecoin’s ubiquity in markets.The Chinese Yuan and Mexican Peso also have Tether-backed versions to assist other countries to enter the larger market.Why Use Tether?Tether enjoys liquidity on virtually every blockchain that accepts Tether
Add Comment