On May 27, Tether, the firm behind the most valuable stablecoin by market cap, made an official announcement on Twitter that it is now providing its USDT stablecoin on Polygon. Tether was first issued through the Bitcoin protocol’s Omni Layer, but it has subsequently moved to other networks like Ethereum and TRON, leading to increasing trade volumes and liquidity.
Tether is the world’s third biggest cryptocurrency, after only Bitcoin and Ethereum, with a market capitalization of around $76.8 billion at the time of writing. Tether previously announced the creation of a new token connected to the Mexican peso (MXNT). The token is meant to boost the company’s visibility and effect across Latin America.
Most stablecoins are backed by currency reserves in order to offer enough collateral if users want to withdraw their funds. On the other hand, TerraUSD, or UST, is part of a new generation of “algorithmic” stablecoins that attempt to base their dollar peg on code. Following the Terra UST collapse, investors’ faith in stablecoins was put to the test.
TerraUSD, an algorithmic stablecoin, and its sister token, LUNA, have been the primary drivers of the bear market, with TerraUSD dropping to almost zero dollars in a matter of days and wiping out over $60 billion in Terra alone.
Investors withdrew over $7 billion from Tether when it momentarily dropped off its dollar peg, as previously reported by U.Today. Tether has announced $82.4 billion in consolidated total assets in response to concerns raised about the reserves underlying the world’s biggest stablecoin.
