Tether has expanded its reach in the crypto market by launching its USDT stablecoin on Polygon (previously Matic Network).
Tether, USDT, stablecoin issuer’s flagship product, has launched on the Ethereum scaling solution Polygon in an attempt to solidify its position as the top stablecoin in crypto. According to CoinGecko data, USDT is the most extensively used stablecoin, with a market valuation of roughly $72.5 billion.
Tether is attempting to expand its position across the crypto ecosystem, despite continued concerns in the stablecoin market. The firm claims that the launch of USDT on Polygon will benefit the blockchain network’s ecosystem, which presently hosts over 19,000 decentralized applications. According to Tether, their users can now use USDT to move money in and out of the ecosystem as well as earn yield.
Polygon will be the 11th blockchain on which USDT will be available after Ethereum, Solana, Avalanche, Algorand, Tron, Omni, EOS, Liquid Network, Kusama, and Bitcoin Cash’s Standard Ledger Protocol.
While USDT is available on a variety of blockchains, it is most commonly used on Ethereum and Tron, as shown in the graphic below from The Block’s Coin Metrics Data Dashboard.
The Polygon network is cheaper and faster than Ethereum, which is one of the key reasons for USDT’s appeal on Tron. Traders on Tron prefer USDT to move money between platforms due to its low transaction fee of $1. However, if traders prefer items that are part of the Ethereum ecosystem, they may move to Polygon.
Tether and the stablecoin market as a whole have had a difficult month. When UST, an algorithmic stablecoin related to the Terra blockchain, lost its peg to the dollar, the market’s faith in dollar-pegged assets like USDT was put to the test, resulting in a death spiral that brought Terra’s LUNA token plunging to zero.
Although USDT differs from UST in that it is backed by reserves rather than relying on a dual token method to maintain price stability, it was nonetheless subject to a depeg event as terrified market participants fled for cash. Terra’s market cap dropped by nearly $10 billion in the days following its demise.