Chain Swap: Tether Moves 1 Billion USDT from Tron to Ethereum Amid the DeFi Frenzy
Tether, the stablecoin provider, has moved 1 billion USDT coins from the Tron blockchain to Ethereum’s ecosystem which has been burgeoning, given the increased activity in DeFi. Basically, the whole process involves a swap from the TRC20 token standard to ERC20; an initiative that was coordinated together with a 3rd party according to the Twitter announcement by Tether.
In few hours Tether will coordinate with a 3rd party to perform two chain swaps (conversion from Tron to ERC20 protocol) for 1B USDt. Tether total supply will not change during this process.
Read more here: https://t.co/abfgnELSvi
— Tether (@Tether_to) August 20, 2020
The 1 billion USDT moved by Tether comes as a big blow to Tron blockchain whose supply will now reduce to 3.3 billion. As for Ethereum, its supply increased from a prevailing 7.5 billion to 8.5 billion, a move that will probably scale DeFi growth even more. Notably, Tether’s USDT supply went up by over 2 billion within the recent crypto market bull-run, bringing the total to over 13 billion.
Tether was also keen to highlight that the swap will not affect the current USDT supply but simply initiate a shift in the operating blockchain network. Going by the prospects on Ethereum, the move appears to have been motivated by DeFi activity where the USDT coin has found a niche based on its ability to preserve value in such a volatile ecosystem.
As for the 3rd party exchange involved in the swap, Tether did not disclose which crypto exchange it had tasked with this process. However, data from crypto transfer tracking metric Whale Alert, suggests that Binance might have actually been the 3rd party mentioned in Tether swap tweet. This is based on an alert that $600 million USD was transferred from Binance to Tether’s treasury.
With congestion at all-time high in Ethereum’s network, the latest move to increase USDT supply on this blockchain might not play out very well. Tether, however, operates in a total of 7 blockchains with the latest launch being on the Omisego network. It is this diversity that will probably come in handy should Ethereum’s congestion prove unsustainable.