Tether (USDT), following recent developments in stablecoins’ sphere, has announced it is coordinating a chain Swap to transfer USDT assets form Tron’s TRC-20 into Ethereum and Avalanche’s blockchain.
Tether announced in a tweet that 1 billion USDT would be transferred from Tron’s blockchain into Ethereum. Tether also stated that 20 million additional USDT would be converted into Avalanche. Tether claims that this will not affect the supply of stablecoins.
Tether will soon coordinate with a third party to conduct a chain swap. This involves converting Tron TRC20 from Ethereum ERC20 for 1B USDt, and Tron TRC20 from Avalanche for 20M USDt. During this process, the #tether total supply won’t change.
— Tether (@Tether_to), May 12, 2022
This announcement was made amid concerns of a stablecoin crash following the TerraUSD (UST), and Terra (LUNA), debacles. The USDT price fluctuated on Thursday, with many exchange platforms showing it falling below $0.99. Many expressed concern that the most traded stablecoin was showing signs of struggle.
In a Cointelegraph interview however, Paolo Ardoino, Tether’s chief tech officer, stated that USDT was not like algorithmic stablecoins like UST. Ardoino stated that Tether’s portfolio consists of cash and cash alternatives. This includes cash equivalents, cash market funds, and commercial paper.
Ardoino pointed out that traders are making a lot of money from the fear, uncertainty, and doubt surrounding stablecoins. He said that some companies are purchasing USDT at a lower price than $1 on exchanges, and then redeeming it on Bitfinex or the Tether website for more than $1.
Tether also stated that customers who have been verified are still able redeem USDT online. Tether reported that the stablecoin issuer is not experiencing any problems despite having honored 300 million USDT redemptions within the past 24 hours.
Ardoino stated that, despite numerous “black swan”, events, the stablecoin has never failed to honor redemption. He explained:
Tether is pleased that the market continues its trust in Tether […]. We are an industry that is rapidly changing and will continue to learn from these events together. These events will be a learning opportunity for us all.
Related: Terra’rescue Plan’ still at Large as LUNA falls to $5, Bitcoin surges to $138K in UST
Do Kwon, Terra founder, recently revealed plans to restore the UST stablecoin price. Kwon explained that, before re-pegging UST the best way forward is to “absorb stablecoin supply that wants exit”
Kwon supported the increase in the base pool to 50 million special drawing rights. Terra founder Kwon stated that PoolRecoveryBlock can be decreased from 36 to 18. Kwon stated that this will allow the system to “absorb UST faster.”