Tether recently announced the launch of its new stablecoin USDT0, which is now live on Kraken’s Ethereum scaling solution, Ink. This initiative leverages LayerZero’s Omnichain Fungible Token Standard to create a cross-chain liquidity layer, simplifying USDT transfers across blockchains while improving the experience for both users and developers.

USDT, Tether’s flagship stablecoin, is already the world’s largest single stable asset. However, its liquidity is fragmented across different chains, making it difficult for USDT to move freely. High cross-chain fees have been a major deterrent for regular investors. USDT0 is designed to address these issues. By partnering with LayerZero, it not only enhances cross-chain transaction security but also achieves frictionless transfers (examples to follow), expanding USDT’s applications and usability across blockchains.

Tether CEO Paolo Ardoino commented, “USDT0 offers a critical solution for enabling seamless USDT transfers across ecosystems. By improving interoperability and eliminating barriers, it aligns perfectly with Tether’s broader vision while optimizing user experience. It’s truly exciting to see such practical innovation addressing market needs.”

Streamlining Cross-Chain Transfers and Cutting Costs

While USDT has always been interoperable, its implementation has been somewhat fragmented. Each blockchain hosts its own separate version of USDT, meaning that transferring USDT across chains typically requires cross-chain bridges. These bridges function by burning USDT on one chain and minting an equivalent amount on another, which is inefficient and costly.

USDT0 changes the game: it unifies USDT into a single, fluid asset that can move seamlessly across blockchains. In other words, the same token can now transfer smoothly between networks without fragmentation.

For users, USDT0 eliminates inefficiencies and boosts capital utilization. For instance, consider transferring 10,000 USDT from Ethereum to Avalanche. With traditional methods (left), users incur significant fee losses. However, using LayerZero-powered USDT0 (right), the exact amount sent is received on the target chain, dramatically reducing transaction costs.

Expansion Plan

Ink: Unlocking Institutional Liquidity

USDT0 is making its debut on Ink, an L2 blockchain launched by Kraken, a leading global cryptocurrency exchange. By leveraging the unmatched liquidity of USDT, USDT0 creates a seamless channel for institutional transactions.

Andrew Koller, Ink’s founder, shared his vision: “USDT0 and Ink share a commitment to giving users and developers maximum control over their assets while ensuring smooth access to opportunities. Launching USDT0 on Ink sets a new benchmark for stablecoin liquidity flow across blockchains.”

USDT0 is now integrated with Kraken, allowing deposits and withdrawals on Ink. Additional Kraken integrations are in the pipeline, laying the groundwork for seamless interoperability and a world-class experience for USDT users.

First Partnerships: Berachain and MegaETH

After Ink, Berachain and MegaETH will be the first partners to adopt USDT via USDT0, with more announcements expected soon.

Berachain, an EVM-compatible Layer 1 blockchain, uses an innovative Proof of Liquidity (PoL) consensus mechanism that rewards contributors with its governance token $BGT. USDT0 will integrate with Berachain through Boyco, a platform designed to channel funds directly into the chain’s core applications. Boyco features 11 decentralized applications and 15 asset issuers (including USDT0), serving as an ideal gateway for yield-seeking funds. Its pre-funded vaults have already secured over $1.5 billion in deposits. With the addition of high-utility assets like USDT0, this figure is expected to grow significantly.

MegaETH, a real-time blockchain capable of processing 100,000 transactions per second with block times under 10 milliseconds, combines Ethereum-level security with speed. MegaETH plans to integrate USDT0 across a variety of DeFi applications and payment systems. This blend of real-time tech and Tether’s distribution model is set to drive the next wave of crypto adoption.

In conclusion, USDT remains the largest stablecoin globally and a critical asset for both users and blockchains. By addressing the challenges of cross-chain transaction costs, USDT0 enhances the usability of USDT, paving the way for a more accessible and efficient cryptocurrency ecosystem.

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