Tether (USDT) is a key stablecoin in the crypto world. It’s used for smooth digital transactions and keeps the market stable. But, what makes USDT valuable, and how does it fit into blockchain?
USDT is a stablecoin tied to the U.S. Dollar. It’s designed to keep its value stable, unlike other cryptocurrencies. Tether Limited backs each USDT with a U.S. dollar, ensuring it doesn’t fluctuate wildly like Bitcoin or Ethereum.
USDT works on several blockchains, including Bitcoin’s Omni Layer and Ethereum. This makes it versatile for use in DeFi ecosystems. Smart contracts allow for easy transfer and use across different blockchain networks.
To convert fiat to USDT, users send money to Tether’s reserve. This creates new USDT tokens on the blockchain. To get fiat back, users can redeem USDT for USD, keeping the value stable.
The “mint-and-burn” system keeps USDT’s supply in balance. This ensures its value remains stable, as new tokens are created and old ones are destroyed.
