Tether (USDT) is a cryptocurrency designed for each token to be represented by an underlying US dollar. Each USDT token is tethered to a US dollar that is held in Tether Limited’s reserve balance and can be obtained through the Tether platform. Tether has been issued on the Omni, Ethereum, Tron, EOS, Liquid and Algorand blockchains
What is Stablecoin?
Stablecoins are cryptocurrencies designed to minimize the volatile price movement within the cryptocurrency environment by pegging each token to an underlying crypto, fiat money or exchange traded commodity such as precious metals. Built with the same features as other popular cryptocurrencies, stablecoins offer simple transactions through existing cryptocurrency infrastructure with trustless networks using the appropriate block explorer. This enables payments requested in a particular fiat currency or precious metal, and can protect recipients from sudden price changes.
While USDT’s reserve and issuance system is controversial, compared to the majority of stablecoins, USDT still offers the longest track record and strongest solvency.
Really love how all USDT is treated equal on the exchange but when you want to withdrawal you get a significantly cheaper fee when using the Tron network. So say if you wanted to arbitrage your favorite coin to USDT between markets, you can just transfer the USDT through Tron and save a ton in fees and have under 1 min transactions than using the OMNI or the ERC20 layer, which are significantly higher in fees and take up to hours.
I have a feeling TRC USDT is going to start dominating soon because of how cheap and fast it is.
address I use to receive USDT
USDT-ERC20 is the USDT issued by Tether based on the ETH network. Its deposit address is the ETH address, with deposits and withdrawals taking place on the ETH network. The protocol of USDT-ERC20 is the ERC20 protocol.
.USDT-TRON (TRC20) is the USDT issued by Tether based on the TRON network. The currency deposit address is the TRON address, with deposits and withdrawals taking place on the TRON network. The USDT-TRON (TRC20) uses the TRC20 protocol.
Honestly the fees is a big pain point for Ethereum currently. If they don’t bring 2.0 soon and fix up this mess with POS, projects will move away to another platform and Tron is a strong contender.
The only thing holding currently is that Ethereum has wide adoption by developers and traders/investors alike, the brand association and reputation of delivery is the one holding the sway. Otherwise, who would want to pay $8 for transferring $10 and keep waiting for 25 seconds. This is absurd and doesn’t make business sense at all. People are ignoring this as the market is bullish and Ethereum fees is being managed from profits. As and when profit margins reduce, these transactions will stop happening and people will have to switch. It is simple economics.
Polkadot also has good platform currently although expansion seems a little tricky. Elrond is moving towards Mainnet and so is Cardano. If Ethereum doesn’t move in time, people and DeFi will start switching due to slow network and high fees.
The beauty of this is when one blockchain is super congested, we can move to a different blockchain. Tron isnt crowded like ethereum, thanks @Polah3538
Layer two solutions]build a sub-network on top of an existing blockchain and promise to bring transactions costs to sustainably low levels.
Loopring, DeversiFix and a few other DeFi products exist on layer two ecosystems, but they account for a tiny portion of total DeFi usage.
Two other remedies exist in the form of EIP-1559 and ETH 2.0. While EIP-1559 won’t reduce gas fees, it can make fees more predictable and reduce the possibility of miner manipulation. ETH 2.0 will bring sharding to Ethereum, which enhances the scalability of the base blockchain.
However, considering the trade-offs between ETH 2.0 and layer two solutions, the latter is far more viable as it doesn’t exponentially add to the size of the Ethereum blockchain.
Really an insightful writeup. I have learned a whole lot.
I really love the optionality as the Tether is built on many different blockchains. You can easily choose the one befitting to you. I would go with USDT TRC20 too
