Tether Holdings, the issuer of the world’s largest stablecoin USDT, has abandoned plans to launch its own blockchain. The decision comes as a stark contrast to the prevailing trend of numerous crypto entrepreneurs launching new blockchains, often with questionable use cases.
Tether’s CEO, Paolo Ardoino, explained the rationale behind the decision, citing the simple principle of supply and demand. “We are very good in technology, but I think blockchains will become almost a commodity in the future,” Ardoino said in an interview with Bloomberg News. “Launching a blockchain ourselves might not be the right move. There are very good blockchains.”
While Tether, with its vast resources and the widespread usage of USDT, could have easily launched its own blockchain, the company ultimately decided against it. The saturated market, with a few dominant players, made the venture less appealing.
Data from DefiLlama reveals that the top five blockchains control roughly 86% of the total value of assets locked. Ethereum, the leading blockchain, boasts a total value locked (TVL) of $87.7 billion, while TRON, another popular blockchain, handles 49% of USDT supply.
The success of a blockchain hinges on factors like high speeds, low fees, strong security, and compelling use cases. Ethereum’s dominance, despite its high fees, can be attributed to its first-mover advantage, flexibility for developers, and its position as the home of the second-most liquid token.
Angela Ang, a senior policy advisor at TRM Labs, notes that the blockchain ecosystem has become multichain, with builders and issuers finding advantages in operating on various platforms. However, the viability of new blockchains depends on their ability to offer unique utilities, such as speed, security, cost, or interoperability, that don’t currently exist.
Tether’s Ardoino remains content with the company’s blockchain-agnostic approach, emphasizing the importance of security and sustainability. “For us, blockchains are just transport layers,” he said.
