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Tether (USDT) was created in October 2014, and its main purpose was initially to disrupt the legacy financial system. It does this by providing a vehicle for customers to transact with traditional currencies across the blockchain, without the volatility or complexity typically associated with a digital currency.
Tether is a stablecoin and aims to provide a ‘safe’ digital asset that maintains a stable valuation as its value is pegged to the price of the U.S. dollar. It can be seen as a crypto dollar. The goal is that Tether should always maintain the same value as its peg. It’s assumed that Tether can always be traded for one dollar, despite what happens on the crypto market.
Crypto traders use Tether to provide steady, reliable liquidity to get in and out of other cryptocurrency trades without facing unpredictable losses from volatile price changes. Tether is one of the most liquid cryptocurrencies out there.
In March 2019, Tether was introduced to the Tron blockchain. TRC-20 Token’s (Tron) Developer, Justin Sun made TRC-20 standard to compete with Vitalik Buterin (Ethereum’s developer) that made and developed the ERC-20 for Tether network. In the previous Version of the TRC-10, It was not possible to build smart contracts like the Ethereum protocol. So Justin Sun Updated the protocol and published it with the name of TRC-20 that has the ability to make smart contracts. After he did this, the transfer fee had been reduced.
The TRC20-based USDT enables interoperability with TRON-based protocols and dApps. In addition, it allows users to transact and exchange fiat pegged currencies across the Tron network. The currency deposit address is the TRON address, with deposits and withdrawals taking place on the TRON network.
The TRC20 token is compatible with ERC20, and developers can easily transfer their ERC20 tokens in Ethereum to the TRC20 standard Tron network. Currently, the most used application of Tron network token is related to USDT coin. Created as an algorithmic stablecoin, Justin Sun’s Terra-like stablecoin USDD is now shifting gears towards a hybrid model with improved transparency.
When a user deposits fiat currency into Tether’s reserve, selling fiat to buy USDT, Tether then issues the corresponding digital amount in tokens. The TRC20-based USDT can then be sent, stored, or exchanged.
If a user deposits $100 in the Tether reserve, then in keeping with a 1-to-1 dollar parity, they will receive 100 Tether tokens. Tether coins are destroyed and removed from circulation when users redeem the tokens for fiat currency.
Tether moves across blockchains like many other digital currencies. There are Tether tokens available on various blockchains.
The USDT issued on TRC20 and ERC20 are both identical, however fees to transfer this USDT can often be cheaper on the Tron network using TRC20.
Users can freely use one wallet for storing both versions of Tether. In this wallet, you can receive both USDT (ERC20) and USDT (TRC20). When you want to send USDT from your wallet, you can simply choose which network you want to send it on, either ERC20 or TRC20.
In May 2022, Tether announced that $1 billion USDT will be transferred to Ethereum while another $20 million USDT will go to Avalanche. The announcement came amid fears of a stable coin meltdown after the recent TerraUSD (UST) and Terra (LUNA) crash.
TRC20-USDT blockchain holders had an impressive 3x growth over the past year. According to the Tether transparency report, there are now 32 billion USDT issued on the TRON network making it the largest for the stablecoin. It has a further 1.1 billion authorized but not issued yet which is likely to be this recent transaction. TRON now carries 53.5% of the total 62.8 billion USDT in circulation.
Despite its claim to be a stablecoin, Tether has still witnessed spikes and sharp falls in price. Generally, the price of Tether often fluctuates between $0.99 and $1.0012 - and hardly sees movement beyond those ranges.
TradingBeasts experts believe that by December 2025, Tether crypto price will rise by 20% and that it’ll reach $1.2806811. WalletInvestor makes a less optimistic prediction: according to their crypto professionals, USDT (TRC20) will cost $0.998 on average.
USDT (TRC20) seems to be growing, economically and socially. One billion more USDT has been earmarked for the TRON network, and in 2021, USDT supply has increased by 200%. It seems that USDT might make a good long-term investment.
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The views and opinions expressed here are solely those of the author. Every investment and trading move involves risk. You should conduct your own research when making a decision.
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