USDT Tether is a stablecoin
Tether strives to offer a "safe" digital asset that has a stable value. That is what USDT makes a stablecoin, the value of which is linked to the price of the US dollar. The goal is that the USDT always retains the same value. Stablecoin competitors from Tether include USD Coin (USDC) and DAI (DAI). Crypto traders use Tether to offer stable, reliable liquidity to carry out cryptocurrency transactions and to prevent unpredictable losses from the volatility in digital assets.
How does Tether work?
When a user falls Fiat currency in the reserves of Tether and Fiat sells to buy USDT, Tether calculates the value of the Fiat currency and this amount is paid in USDT tokens. The USDT can then be sent, stored or exchanged. If a user collapses $ 100 in the tether reserve, he receives, in accordance with a 1-on-1 dollar parity, 100 tether tokens. This also works the other way around, when tether coins are exchanged and removed from the circuit, the users for the exchanged tokens will receive Fiat currency. Tether moves over different block chains such as many other digital currencies. Well -known block chains that make Tether transactions possible are Ethereum, Solana, Tron Network and the Avalanche Chain.
The history of Tether
The early years of Tether go back to 2012, when Jr Willet wanted to build new digital assets on the Bitcoin protocol. Willet implemented this idea with the so-called Mastercoin and one of the original co-founders of Mastercoin would later become the co-founder of Tether in 2014. The use of Tether for liquidity on trading platforms began when it was added to the Bitfinex grant in January 2015.
How is Tether supported?
Although Stablecoins are a popular choice among crypto traders, Tether has some additional controversies with regard to liquidity problems and whether the reserves are sufficient to cover the number of USDT tokens in circulation. The Tether website states that all Tether tokens 1 on 1 are linked to a corresponding Fiat currency and are 100% covered by Tether's reserves.
