Today, Tether announced that it has also launched its USDT tokens on Polygon, one of Ethereum’s largest layer-2s.
Tether lands on the layer-2 Polygon
USDT is the world’s most widely used stablecoin pegged to the US dollar, while Polygon is one of the major layer-2s for Ethereum.
For some time now, USDT’s daily transactions on Ethereum’s blockchain have been surpassed by those on Tron’s blockchain, mainly due to high fees. Thanks to Polygon, it will be possible to send USDT with much lower fees.
There are currently no USDT tokens in circulation on Polygon yet, but on the transparency page of Tether’s official website, Polygon has already appeared as one of the blockchains on which USDT are issued.
Tether states that the addition of USDT to the Polygon ecosystem is key to offering an important new stablecoin option to over 8,000 teams developing on this blockchain. In particular, USDT could play an essential role in supporting the growth of Polygon’s DeFi ecosystem.
Polygon is currently the sixth-largest blockchain in the world for TVL on DeFi protocols, with about $2.5 billion, which puts it well above Cronos, though well behind Solana. Ethereum on the other hand has a TVL of $67 billion.
Polygon is a scaling solution operating on the Ethereum blockchain, with more than 19,000 dApps. Its PoS consensus algorithm has processed over 1.6 billion transactions in total, with over 142 million unique addresses and over $5 billion in assets held.
Tether’s expansion within different ecosystems
USDT is now active on eleven networks, including Ethereum, Tron, Solana, Kusama, Algorand, EOS, Liquid Network, Omni, and Bitcoin Cash’s Standard Ledger protocol.
Tether is the stablecoin with the largest market capitalization in the world, at $73 billion, surpassing that of all other dollar-pegged stablecoins combined.
It was created in October 2014 during the first major bear market in the history of crypto markets, and survived the second between 2018 and 2019.
Despite many raising doubts as to whether its USDT tokens are fully backed by as many dollar reserves, the company recently released an independent audit certifying that as of 31 March its reserves covered more than 100% of USDT tokens in circulation.
In recent weeks, following the collapse of Terra’s algorithmic stablecoin (UST), USDT’s market capitalization has shrunk by nearly $10 billion due to the return of USDT to Tether in exchange for US dollars at a 1:1 ratio.
At first, there was some fear in the crypto markets that USDT might also lose its peg to the dollar, but within a few hours it regained what it had lost and USDT was once again worth about $1.
The CTO of Tether, Paolo Ardoino, said:
“We’re excited to launch USDt on Polygon, offering its community access to the most liquid, stable, and trusted stablecoin in the digital token space. The Polygon ecosystem has witnessed historical growth this year and we believe Tether will be essential in helping it continue to thrive”.