Tether, the company that issued stablecoins, made an announcement on November 18 about a $1 billion chain swap to transfer the USDT it had kept on the Solana blockchain to the USDT stored on the Ethereum blockchain.
The news was made at a time when Solana is experiencing problems as a direct result of the failure of the cryptocurrency exchange FTX. Only a few weeks ago, Solana was rated among the top five largest cryptocurrencies by market valuation. Solana is now ranked 16th by market value and has had a decline of 25.4% during the last week. The all-time high price of the asset was $256; this is down 95% from its current trading price of $13.33.
A cryptocurrency transaction that involves shifting coins from one blockchain to another is referred to as a “chain swap.” Tether has executed this approach in the past when there was a shift in demand to make use of its stablecoins on a certain blockchain. For instance, in the middle of the year 2020, Tether made two separate transactions totaling 1 billion dollars’ worth of swaps from Tron to Ethereum over the course of a period of two months.
An alternative to Ethereum, Solana (also known as SOL) is a blockchain that can execute smart contracts, much like Tron and other blockchains. As a result of the incident with FTX, big cryptocurrencies like Bitcoin and Ethereum have both been subject to sell-offs, but the value of Solana has been significantly impacted by the situation.
FTX, which was formerly one of the most prominent exchanges, has comprehensive ties with Solana. The company has made substantial investments in a number of cryptocurrency projects associated with Solana, and it played a significant role in the creation of Solana’s primary decentralised exchange and DeFi liquidity provider, Serum. On November 12, there was reportedly a hack that occurred on the FTX exchange. At the same time, withdrawals were stopped, so the cryptocurrency exchange Serum was effectively pulled down. The creators of Solana DeFi turned off access to Serum out of concern that the private keys for the project, which were also stored inside FTX, had been stolen or somehow compromised.
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