As a seasoned researcher with years of experience delving into the complex world of cryptocurrencies and blockchain technology, I find Tether’s decision to forego launching its own blockchain intriguing. Given my past encounters with countless projects jumping on the blockchain bandwagon, it’s refreshing to see a player as influential as Tether taking a more thoughtful approach.
As per a recent report by Suvashree Ghosh for Bloomberg News, in the rapidly evolving crypto market where new blockchains appear almost daily, Tether – the company responsible for the world’s most prominent stablecoin, USDT – is choosing a unique approach. Unlike many others, Tether has opted not to create its own blockchain, going against the prevailing trend.
In a conversation with Bloomberg, the CEO of Tether, Paolo Ardoino, explained Tether’s stance. He pointed out that the market for blockchain technology is becoming increasingly crowded and anticipates that, in time, blockchain technology will become a common commodity. Despite Tether’s technological superiority, Ardoino stated that it might not be wise for them to develop their own blockchain due to the numerous high-quality existing options available.
Despite Tether’s substantial financial resources and the extensive usage of USDT, the company seems unperturbed by the prospect of venturing into an already congested market. Interestingly, data from DefiLlama, as reported by Bloomberg, reveals that a small group of five blockchains hold roughly 86% of the value locked in decentralized finance platforms.
Among all blockchains, Ethereum, with significant commercial relevance, holds approximately 65.9% ($87.7 billion) of the total value locked (TVL), amounting to a combined $133.2 billion across all platforms, as reported by DefiLlama.
Bloomberg emphasizes that key elements such as swift operation, low costs, robust security, and useful applications are essential for a blockchain to thrive. Ethereum’s early entry into the market, its developer-friendly nature, and its role as the base for the second-most liquid token have been significant factors in its dominance, despite its comparatively high fees.
Angela Ang, a senior advisor on policy at TRM Labs, a firm specializing in blockchain intelligence, notes that the blockchain landscape is now made up of numerous chains, with creators and distributors operating across various platforms. According to an article by Bloomberg, Ang underscores the importance of these platforms providing distinct benefits like speed, security, affordability, compatibility, or innovative characteristics, for their commercial sustainability.
The CEO of Tether appears satisfied with the company’s existing “neutral-to-blockchain” strategy, provided that the markets where USDT is exchanged prioritize strong security and durability. In simpler terms, according to Ardoino, “Blockchains for us are simply transportation networks.”
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2024-09-02 11:45