On Aug. 10, 2020, Tether (USDt) announced via an official tweet that they were working with a third party to perform two chain swap conversions from Tron’s TRC20 protocol to Ethereum-based ERC20 Protocol.
According to Tether, the next swap, which involves a substantial amount of 500 million USDt, wouldn’t alter the total supply of tokens in circulation. It will only be transferred from the Tron blockchain to ETH.
Tether joined forces with the Tron Foundation to launch the USDt stablecoin as a TRC-20 token in early 2019. The partnership started well as TRC20-based USDt quickly rose to hit a total supply of 490M tokens.
This volume uptick prompted Tron CEO, Justin Sun, to predict that USDt would soon be the dominant dollar-pegged digital asset.
Shortly after the Sun’s prediction, TRC-20 tokens minted by Tether became the second-largest stablecoin. The tokens even surpassed the original USDt issued on the BTC-based Omni Layer Protocol.
Stable Coin Issuer Transfers USDt Tokens to Ethereum
Since the initial success of Tron’s collaboration with Tether, Sun’s platform has seen millions of USDt swapped to the Ethereum network.
The previous swap occurred on June 29, 2020. Tether withdrew $300M in USDT from Tron and injected it into Ethereum’s ecosystem.
The move meant that Ethereum’s protocol now houses the majority of the USDt coins (about 61.6%).
Meanwhile, the Tron protocol now holds about 29.4 % of the total USDt in circulation. Other blockchain networks such as EOSIO, Omni, and Liquid are to split the remaining 9%.
USDt Move Could Highlight Tether’s DeFi Interest
Paolo Ardoino, CEO of Tether and its associated exchange Bitfinex, hasn’t given the exact reason behind the recent chain swaps. Still, it is evident that USDt is slowly bailing out on Tron.
Justin Sun, who frequently posts tweets overhyping even the slightest of new milestones for the TRC-20 version of Tether, has also been eerily silent over the recent USDt swaps to Ethereum.
The silence from both camps has left room for plenty of speculation. Some members of the crypto community argue that the reason for the USDt swaps is the issuer’s desire to participate in the blossoming Ethereum DeFi projects.
Despite the significant amounts of USDt swaps to ETH, Justin Sun’s platform remains unfazed as Tron conducted the IEO of its dollar-backed stablecoin dubbed “JUST” in May.