Key Takeaways
- USDT0 is an omnichain version of Tether’s USDT.
- The new stablecoin is gathering steam as it expands across blockchain networks.
- This cross-chain liquidity thesis has led to new use cases, USDT0 CEO Lorenzo R. told CCN
Nine months since its launch, USDT0 is starting to gain traction.
Following a string of blockchain deployments in September, the omnichain version of USDT has started to generate upward of half a billion dollars in daily transaction volume.
What Is USDT0?
Compared to Circle, which has deployed USDC across 28 blockchain networks, Tether has traditionally been more selective, only issuing native USDT on 12 chains. This has led platforms like BNB and Linea to rely on wrapped tokens, ported in via a third-party bridge.
USDT0 aims to resolve this. Using Layerzero’s Omnichain Fungible Token (OFT) standard, the stablecoin is already live on eight networks, despite being less than a year old.
The goal is to create a “unified liquidity layer” where tokens can move between any chain, “without slippage in a matter of seconds,” USDT0 CEO and co-founder, Lorenzo R. told CCN at TOKEN2049.
The concept is most powerful for small chains, which have often struggled to attract capital Lorenzo observed.
So far, on-chain metrics suggest the concept is working. Cross-chain transfer volume was already running as high as $350 million per day when USDT0 went live on Plasma in September, Lorenzo added. Since then, it has climbed even higher.
Cross-Chain Liquidity
Without a multi-chain transfer mechanism like Circle Gateway, users encounter friction moving classic USDT between networks.
Because Tether doesn’t operate its own canonical bridges, swapping Ethereum USDT for Tron USDT, for example, requires a third-party bridge or centralized exchange, both of which incur fees and introduce counterparty risk.
In contrast, USDT0 moves more freely. Compared to legacy stablecoin bridges, cross-chain transfers are much cheaper than with native USDT. Users only need to pay gas and a small LayerZero relay fee.
Moreover, depending on the source and destination chains, moving USDT0 between networks may not even require other tokens.
Stable, which is among a new cohort of dedicated stablecoin chains, uses USDT0 as its native gas currency, removing the need for wallets to hold multiple assets. Meanwhile, Plasma, which is also optimized for stablecoins, abstracts away gas fees entirely for basic transfers.
Use Cases and Adoption
According to Lorenzo, a number of use cases have emerged for USDT0’s enhanced cross-chain liquidity:
“You see centralized exchanges rebalancing the treasuries. You see payment providers and payment infrastructures converging their treasuries on one network. You see DeFi protocols processing liquidations, or tapping into larger liquidity pools.”
With these use cases driving adoption, USDT0’s daily transfer volume has climbed from less than a million dollars in January, to $869 million on Oct. 2, Lorenzo said.
For now, that remains just a small fraction of USDT’s overall volume, which frequently exceeds $200 billion a day. But as users increasingly demand more frictionless ways of moving value between blockchains, USDT0 could transform the stablecoin into a truly liquid cross-chain asset.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
Insha Zia is the News Editor at CCN. Based in Dubai, United Arab Emirates, he ensures the CCN newsroom provides value to readers by educating, informing, and engaging them with accurate and timely coverage.
Before joining CCN, Insha was a Senior Journalist at DailyCoin, where his career in crypto journalism took off. At DailyCoin he garnered ample experience by covering some of the biggest news in the crypto industry, especially in the Cardano ecosystem, and maintain solid relations with KOLs in the industry.
Insha has worked as a ghostwriter and a developer for three years. He has co-authored numerous articles in reputable publications, including Hackernoon, Yahoo Finance, and Nasdaq. He also has experience as a Solidity Developer and a Data Analyst.
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