USDT (Tether) Dominance on Ethereum to Face the Liquid Test

Ethereum ETH Istanbul

USD-Tether is the largest stablecoin with a market capitalization of more than $4.63 billion. The increase or decrease in the supply of the stablecoin has had a notable effects on the crypto market.

Adam Back, the CEO of Blockstream notes in a recent tweeted of how Tether came into existence because of Bitcoin, and have now established a ’cause and effect’ relationship. Due to its’ dominance on exchanges, Tether is one of the leading indicators of big price moves in Bitcoin.

USDT on Ethereum Dominance

The issuance of Tether has now ignited a new battle for dominance in the crypto space. Tether was originally issued on OMNI. However, since 2019, USDT was created on Ethereum, Tron, EOS and recently Liquid as well. Currently, Ethereum dominates the issuance with 48% share.

Moreover, the USDT transfer on Ethereum are taking over the majority share of the Ethereum Blockchain itself. Recently, Ryan Watkins from Messari Research reported that,

Ethereum’s economy is now dominated by stable value transfer. This is an incredible achievement.

According to the findings, since may 2019, the value transfers of USDT on Ethereum surpassed the value transfers of ETH and ERC20 tokens. Moreover, ever since, the difference has grown further; so much so, that USDT now dominates the entire platform.

ethereum usdt
Value Transfers on Ethereum Blockchain (Source)

The Liquid Test

However, Liquid Network developed by Blockstream looks to take-over from Ethereum’s share soon. Grubles from Blockstream tweeted,

I see $USDt on Ethereum as a stopgap measure for more #LiquidNetwork integration on exchanges. There just isn’t much point to a centralized asset mainly moved between exchanges being on a “decentralized” platform. It’s backwards and inefficient.

The Liquid Network is built for Exchanges and brokers, and it is becoming fairly popular with L-BTC and L-USDT integrations on exchanges. Moreover, Tether is primarily used on exchanges to trader Bitcoin and Altcoins for USD or FIAT equivalent pair. Hence, the shift in the dominance is possible.

Furthermore, it is not new for USDT to shift from its’ platform. The stablecoin once only issued on OMNI, has now shifted its dominance to Ethereum with a 48% share compared to OMNI’s 32%.

The actual effect on the price of ETH token due to the increase is also questionable. In case of a shift, the volume of transactions on Ethereum would decrease which is not healthy for any network.

As recently reported on CoinGape, Liquid Network does not introduce a seperate crypto for its Blockchain. The fact has been appreciated notable Bitcoin investors.

How do thing the market share of USDT affects the price of cryptocurrencies? Please share your views with us.

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