Tether (USDT) Starts Migration to Ethereum Network
After Binance announced it would switch to Ethereum-based wallets for USDT, Tether also started minting new ERC-20 coins.
Tether (USDT) is evolving and may end up moving more coins to the Ethereum (ETH) network. A day earlier, Binance announced it would close withdrawals for Omni-based USDT, and switch to ERC-20 wallets, in effect serving as a token swap mechanism. Later, the CTO of Tether, Paolo Ardoino, explained the move, by stating that more USDT would be moved.
Tether will burn some of the tokens, but end up with a higher supply on the Ethereum network. Currently, there are 1.2 billion ERC-20 tokens, with 100 million tokens minted on July 4.
The technological shift in USDT may have repercussions for multiple assets. Until recently, ETH has been one of the altcoins receiving the most robust USDT inflows, boosting its price above $300 and showing relatively strong growth in 2019.
But ERC-20 tokens are transferable with greater ease, and may end up boosting liquidity on decentralized exchanges as well.
Currently, more than $3.07 billion’s equivalent flow into Bitcoin (BTC) in 24 hours, based on Coinlib data. Inflows to ETH are much lower, at around $600 million’s equivalent. Only a handful of leading coins receive USDT inflows, thus having the potential for higher liquidity and price gains.
The switch to the Ethereum network also reawakened talks of a “flippening”, based on the observation that the BTC price rise reached peak levels only after more and more USDT entered circulation since 2017. For now, it is impossible to determine what effect this would have on the market prices and dominance. Even ERC-20 coins can flow into BTC through exchanges. Using Ethereum-based tokens is also relatively easier and more accessible through MyEtherWallet.
The Ethereum network has a much lower hashrate compared to Bitcoin, hence the Omni-based coins were better-protected. In the future, the Ethereum approach may even switch away from mining and into proof-of-stake.
Tether has tested the EOS and TRON networks for its stablecoins, still minting only a limited amount of assets.