HomeNEWSTether to burn 2 billion USDT due to chain swap excesses

Tether to burn 2 billion USDT due to chain swap excesses


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In a Twitter post today, the firm behind the world’s largest stablecoin, Tether has announced that it’ll burn about 2 billion USDT on the Ethereum network. As revealed, Tether will burn the token accrued in its treasury wallet as part of previous chain swaps.

Also, the firm stated that the total supply of USDT will not change despite the burning process. Providing more insights into the process, Tether attached a blog post explaining the concept of its chain swap. Tether explained that the burning process came into play due to the excesses of customers’ funds while requesting to swap on different chains.

According to Tether, if a chain swap fund surpasses the value of USDT held in it’s treasury wallet on the destination chain, the firm will have to mint new USDT and transfer them to the destination blockchain. Upon the completion of the transfer, Tether will be left with two options to regulate the newly minted USDT. Tether can retain the tokens in its treasury wallet on the destination blockchain or burn them. Presently, there are about 73,141,766,321 USDT in supply, with 68,182,782,220 USDT in circulation.

More so, top cryptocurrency networks like Bitcoin, Ethereum, EOS, Tron, Algorand, and OMG presently support the stablecoin. With time, Tether aims to extend USDT-supported networks to facilitate more adoption of the stablecoin. The Tron network houses the largest percentage of the USDT in circulation with $37,125,522,535.96. Also, the Ethereum network comes second with $32,284,517,903.06.

Insight into Tether’s USDT market dominance in the stablecoin sphere

As the first fiat-collateralized stablecoin, the USDT is majorly backed by the USD, while its reserve has generated series of controversies in the past. Now, the stablecoin is enjoying good market dominance in the stablecoin sphere. USDT is the largest stablecoin by market cap, leading the pack of USDC, Binance USD, and DAI as the top four stablecoins. As of press time, the stablecoin sphere has a market cap of $138 billion, based on market data provided by Coinmarketcap.

The big four stablecoins added more than $130 billion to market cap of the stablecoin sphere, thus, dominating the market. Despite their dominance, only a little amount of stablecoins are within the coffers of cryptocurrency exchanges. Tether’s USDT is enduring stern competition from Circle’s USDC. Lately, USDC has reduced the market dominance of USDT as many believe it to be less controversial than it’s counterpart.

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David Idowu
David Idowu
David Idowu is a crypto reporter and trader with wealthy years of experience. He believes that blockchain technology has numerous opportunities that are begging for proper utilization. Away from work, David is either reading about World Politics, History or Tech Innovations.

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