Tether

Tether is a controversial cryptocurrency with tokens issued by Tether Limited.

What is Tether?

  • USDT is a stablecoin (stable-value cryptocurrency) that mirrors the price of the U.S. dollar, issued by a Hong Kong-based company Tether. The token’s peg to the USD is achieved via maintaining a sum of dollars in reserves, that is equal to the number of USDT in circulation.
  • Originally launched in July 2014 as Realcoin, a second-layer cryptocurrency token built on top of Bitcoin’s blockchain through the use of the Omni platform. It was later renamed to USTether, and then, finally, to USDT. In addition to Bitcoin’s, USDT was later updated to work on the Ethereum, EOS, Tron, Algorand, and OMG blockchain.
  • USDT does not have its own blockchain — instead, it operates as a second-layer token on top of other cryptocurrencies’ blockchains: Bitcoin, Ethereum, EOS, Tron, Algorand, Bitcoin Cash and OMG, and is secured by their respective hashing algorithms.
  • Tether reveals that USD is held in reserve and USDT always undergoes periodic audits by professionals. Users have easy access to information and can verify any transactions that occur on the blockchain.

Key Metrics

TickerUSDT
Token NameTether
Token Type/ProtocolERC-20, TRC-20, BSC
Total Token Supply60,476,291,004 USDT
Current Circulating Supply  See Coinmarketcap
Market Capitalisation See Coinmarketcap
Token Creation DateJuly 2014
Can it be mined?Yes

Who is behind Tether?

USDT — or as it was known at the time, Realcoin — was launched in 2014 by Brock Pierce, Reeve Collins and Craig Sellars.  The company was rebranded to ‘Tether’ later in 2015. 

What is the purpose of Tether?

The stated purpose of USDT is to combine the unrestricted nature of cryptocurrencies — which can be sent between users without a trusted third-party intermediary — with the stable value of the US dollar.

Insights:

Although Tether has a good reputation and is portrayed as a stable coin, there is another side which has come to light in recent times. On 31 March 2021, they revealed that less than 4% of their assets are in actual cash. While the rest is in loans, bonds, precious metals and other tokens.

Risks:

  • The volatility of USDT varies upon the backed-up asset, therefore currency depreciation would directly affect the price of USDT accordingly. 
  • The token’s reliability remains controversial due to the intransparency of verification and backing up asset processes (The number of US dollars in its reserves might not match with the number of USDT coins in circulation). Even though it is undergone by a law firm, in fact it requires an actual audit according to the law.

News and Updates:

  • Kiklabb, a UAE fully integrated entity offering trade licenses and visas, has issued a policy accepting BTC, ETH and USDT as a form of payment for the services.
  • Tether is set to move 1 billion more USDT from Tron to the Ethereum blockchain. This is the second massive stablecoin swap as 1 billion USDT had previously been moved from Tron to Ethereum. 
  • There is a case in which USDT sent the wrong Defi address and Tether has recovered by requesting the trader to verify the evidence. Tether then used one of the functions in the smart contract to blacklist the wrong address, which Tether can suspend or even remove that particular USDT between these two addresses. This function is available only on USDT in Ethereum and Tron blockchain.

Community & Whitepaper Links:

Disclaimer: 

All investment is speculative and involves substantial risk and uncertainty. Investors should understand the nature of digital assets including the terms of return and the risk of assets. We encourage investors to fully understand the assets and the risk associated with them prior to making any investment.  

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