Show case: the stable coin TetherUS
In 2015 Tether created TetherUS tokens to represent US Dollar as digital token. It has become the dominant “stable coin” in the cryptocurrency space and it’s one of the most active tokens using our platform.
How Tether utilizes the Omni Layer
The TetherUS tokens were one of the first 50 created digital tokens on the Omni Layer. It was created as token with manageable supply. With this token type, an issuer can increase or decrease the number of outstanding units.
Whenever there is more demand for TetherUS tokens, the issuer can grant new tokens and when tokens are converted back into USD, tokens can be revoked and destroyed. This has happened on regular basis, as indicated by TetherUS’ ever changing market capitalization.
Market reach and dominance
Both in terms of market capitalization, as well as trading volume on exchanges, TetherUS is one of the top ten tokens in the cryptocurrency space.
According to blockspur.com there are 638,576 USDT holders. Despite the outstanding supply, other stable coins, like USD Coin with only 6,100 USDC holders, seem rather small in comparison.
However, we from the Omni Layer were wondering, how about on-chain transaction volume and value?
Let’s first look at the number of transactions and compare it with the number of Bitcoin transactions over the last 30 days:
We can see, about 5 % of all daily Bitcoin transactions involve TetherUS tokens.
This is interesting, but how about actually transferred value? To compare this, we used blockchain.com’s charts for the estimated USD transaction volume of Bitcoin and matched it against the value of TetherUS transfers:
Over the last 30 days on average 30.7 % of the combined estimated transferred value of Bitcoin and TetherUS can be attributed to Tether. Surprisingly, on 17th December 2018 the estimated transferred value of TetherUS even surpassed the estimated transferred value of Bitcoin on that day with 792 million USDT vs. 548 million USD worth of Bitcoin.
This methodology has a few potential pitfalls, most notably: transferred on-chain value does not necessarily represent actual economic on-chain activity. E.g. while blockchain.com’s transaction value estimation may underestimate Bitcoin’s transferred value by only considering output values that are likely not change, Tether’s transferred value may be inflated due to extra transactions resulting from exchanges sweeping USDT deposits to other internal wallets.
Nevertheless, the signs are clear: digital tokens play an important role in today’s ecosystem and are here to stay.