Author(s): @Bobby_StableNode Tags: asset-onboarding Asset Name: Tether Asset Code: USDT-SPL-USD Submission Date: 2022-06-21 Ratification Date: 2022-07-12 Status: Active Forum URL: https://forum.jetprotocol.io/t/asset-onboarding-application-usdt-spl-usd-tether/998
What is your motivation for submitting this application?
The purpose of this application is to provide Jet Community with the details to decide whether the community wants to onboard USDT as a collateral asset.
What is your association to the proposed asset?
What are the key benefits to the Jet Protocol for onboarding the asset?
USDT is the leading stablecoin that provides stability and liquidity across most ecosystems including Solana. USDT-SPL is fully backed by reserves such as traditional currency and cash equivalents and may include other assets and receivables from loans made by Tether to third parties. USDT also undergoes continuous audits.
What are the known limitations of the asset?
USDT is a widely adopted stablecoin, accessible to any wallet holders to freely use within DeFi across a variety of chains. However, USDT did have a history of controversy where they failed to provide financial statements to prove the backing of Tether. Since 2019 it has become public knowledge that USDT is not backed by solely fiat currency. There is a variety of loans, precious metals, and digital tokens backing Tether. Although this situation cannot be classified as a technical limitation on the use of USDT, it can be considered a limitation in terms of adoption and image of the token.
1. Please provide a brief, high-level description of the asset’s native ecosystem (project), including protocol’s type (peer-to-peer/ peer-to-liquidity/ etc.).
USDT-SPL is a project of Ifinex - an umbrella company that also manages the exchange “Bitfinex”. Originally Tether was created by bitcoin and cryptocurrency enthusiasts in 2014 with the aim to act as a 1-1 issuance for USD on both Bitcoin and Ethereum. Exchanges hold the primary users of USDT as an alternative to fiat currencies as it reduces the need to hold a banking relationship. USDT-ERC20 has always been one of the most popular stablecoins since its creation.
Tether Limited was founded in 2014 by Brock Pierce, Craig Sellars and Reeve Collins. None of the founders are currently involved in the project.
3. Please indicate the ICO date, initial price and valuation of the token and total capital raised (in USD and crypto terms).
- Date of Creation: Mar 11, 2021
- Initial price and valuation: $1
- Total capital raised: Not reported for USDT or USDT-SPL
4. How much of the capital raised via the ICO was converted into FIAT (in terms of FIAT currency and amount of tokens)?
USDT revolves around a proof-of-reserve system. Users will deposit X amount of fiat currency into the Tether bank account and Tether will create USDT tokens to send to the user. Likewise, users can deposit USDT into a Tether account and it will be taken out of circulation with the user being sent fiat to their bank account.
Pre-ICO investors: N/A
Current token distributions for USDT can be found here. Token distribution changes depending on the amount of USDT being minted and burned but there has been an increase since its inception.
- Users are able to deposit and withdraw a minimum amount of $100,000 with fees of $1,000 or 0.1% (greater).
- Verification fee of $150
- No fees for Tether deposit or withdrawal.
The protocol undergoes regular audits every three months.
USDT-SPL (USD coin)
USDT is a fiat-collateralized stablecoin that offers the advantages of trading blockchain-based assets while mitigating price risk and preventing high volatility.
USDT-SPL acts as a one-to-one representation of USD allowing users to use a fiat collateralized stablecoin across decentralized applications. USDT-SPL allows users to purchase stablecoins as an alternative fiat on the Tether platform. This provides users an opportunity to store their money on-chain in a stablecoin avoiding volatile cryptocurrencies. Users can also convert their USDT-SPL into fiat on the Tether platform
USDT-SPL is one of the most popular stablecoins and has integrations across the following chains; Bitcoin, Ethereum, Solana, Tron, EOS, Algorand, OMG Network, Bitcoin Cash, and Tezos. USDT-SPL also allows users to avoid needing a relationship with their bank, as they can purchase USDT off the market making it easier for users to hedge against volatility.
Wallets that support USDT: Ledger, TrustWallet, MyEtherWallet, Binance wallet, and many more.
Wallets that support USDT-SPL: Ledger, Phantom, Solflare, Sollet, Atomic, and Exodus.
Web3 platforms with a USDT presence: Maker, Uniswap, Aave, Compound, PancakeSwap, 1INCH, and many more.
Web3 platforms with a USDT-SPL presence: Serum, Raydium, Mango Markets, Star Atlas and Magic Eden.
6. Please provide all Smart Contract address. If the project is open source, detail how the Smart Contracts are implemented.
Serum, Sushi, Raydium, Orca, Jupiter and Atrix
3. Please provide 7-day asset trading history (daily aggregated trading volumes for trading pair of asset with USDC).
You can see the top 10 pairs with USDT on Serum using Vybe network.
Pyth - Markets
5. How often does the asset drop significantly in price? Please provide a link to the price history.
USDT does have a history of a few depegs but they are attached to significant events.
- It fell to around $0.92 in 2018 due to concerns surrounding its collateral.
- Dropped to around $0.95 for less than a day due to UST issues.
7. For algorithmic stablecoins only : Please provide details on the risks associated with the design.
8. For wrapped assets only : Which bridges are used? Are they custodial or non-custodial? Are they audited?
All DeFi users as USDT is one of the most popular stablecoins in the Solana ecosystem and others.
Fiat-collateralized stablecoin. Each USDT is backed by reserves of currency, bonds, loans and other.
3. Is the asset supply expected to increase or decrease over time? Is there a token burn mechanism? Is the project able to mint more tokens in the future?
In the long term, it is expected that the supply of USDT will increase as it revolves around the amount of fiat in circulation, which we expect to increase in the long term. USDT has both a mint and burn mechanism:
- Mint mechanism: Trade fiat for USDT-SPL
- Burn mechanism: Trade USDT-SPL for fiat
6. Are there tokens on vesting schedule? If yes, what is that schedule and related vesture limitations?
No. There is a mint and burn mechanism only. No vesting.
Internally USDT-SPL is not used for this case. However, projects might use USDT for liquidity mining.
b. Organization Name: Tether Limited
c. Jurisdiction: Hong Kong
5. Has the project or the asset obtained any legal opinions on the regulatory standing of the token? If yes, please provide links to the relevant documentation.
6. Has the project or the asset had any legal interactions? If so, describe and provide documentation.
Link(s) to project’s documentation portal/ source code for the system(s) that interact with the proposed asset:
- USDT-SPL Address: Es9vMFrzaCERmJfrF4H2FYD4KCoNkY11McCe8BenwNYB
The poll below is solely for signaling purposes to showcase the sentiment of the community.