[Asset Onboarding Application] - $USDT - SPL - USD Tether

Interested Party Profile

Party submitting application: Bobby Bola @StableNode
Website: https://www.stablenode.xyz/
Contact: bobby@stablenode.xyz
Submission Date: 06/21/22
If endorsed by Jet Community Member,list here: No

Application Profile

  1. 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.
  2. What is your association to the proposed asset?
    No Association.
  3. 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.
  4. 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.

Project Profile

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.

2. Who are the founding members? What is their current involvement with the project?

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)?

N/A

5. What was the way of issuing and distributing the tokens? Were there pre-ICO investors?

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

6. What is the current token distribution (project team vs. investors vs. public)?

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.

7. Are there any fees generated by the protocol? If yes, please provide details and amounts.

  • 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.

8. Is the protocol audited? By what firms? Please provide link(s) to the audit documentation

The protocol undergoes regular audits every three months.

MHA Cayman: Mar 31, 2022
MHA Cayman: Dec 31, 2021
Moore: September 31, 2022

9. Is the protocol open source? If yes, please provide links to the repository.

N/A

10. Other relevant project data or comments:

N/A

Asset Profile

1. Asset name:

USDT-SPL (USD coin)

2. Asset type (native/ wrapped):

Native

3. One-sentence description of the asset:

USDT is a fiat-collateralized stablecoin that offers the advantages of trading blockchain-based assets while mitigating price risk and preventing high volatility.

4. What’s the purpose of the asset within its native ecosystem?

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

5. Does the asset have any use outside of its native ecosystem (integrated protocols)?

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.

Es9vMFrzaCERmJfrF4H2FYD4KCoNkY11McCe8BenwNYB

Asset Liquidity

1. What exchange(s) support the asset?

Serum, Sushi, Raydium, Orca, Jupiter and Atrix

2. Does the asset have liquidity on Serum? What is the liquidity depth (resting orders)?

Yes

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.

4. Which oracles monitor the asset? How many feeds are available?

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.

6. For stablecoins only : Has the asset ever lost the peg? If yes, for what reason?

Yes.

  • 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.

N/A

8. For wrapped assets only : Which bridges are used? Are they custodial or non-custodial? Are they audited?

N/A

9. What amount of asset’s liquidity exists in the integrated protocols (if applicable)?

10. List any parties interested in taking part in liquidations for the proposed asset type.

All DeFi users as USDT is one of the most popular stablecoins in the Solana ecosystem and others.

Key Mechanics

1. How many active addresses/ users currently hold the asset?

327,994

2. Please provide a brief overview of the tokenomics.

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

4. Please explain the staking mechanism (if any).

N/A

5. Please explain the slashing mechanism (if any).

N/A

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.

7. Are any tokens allocated for specific purposes or issuance schedules (e.g. liquidity mining)?

Internally USDT-SPL is not used for this case. However, projects might use USDT for liquidity mining.

Legal Profile

1. Is the project or the asset owned by any incorporated organization?

a. Yes
b. Organization Name: Tether Limited
c. Jurisdiction: Hong Kong

2. In which jurisdictions was the token issued?

British Virgin Islands

3. Was the token issued as part of regulatory process (e.g. securities offering)?

No

4. Was the token issued as part of fundraising process?

No

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.

Settlement
Settlement

6. Has the project or the asset had any legal interactions? If so, describe and provide documentation.

Tether will pay $41 million dollars over ‘misleading claims’ that it was fully backed by US dollars.

Links

Link to project’s white paper:

Link(s) to active communities related to the project:

Link(s) to project’s documentation portal/ source code for the system(s) that interact with the proposed asset:

Link(s) to audits - both procedural and Smart Contracts:

Link(s) to legal opinions:

Link(s) to other legal material:

Other relevant links:

List all relevant Solana addresses here:

  • USDT-SPL Address: Es9vMFrzaCERmJfrF4H2FYD4KCoNkY11McCe8BenwNYB

The poll below is solely for signaling purposes to showcase the sentiment of the community.

Should USDT-SPL be included as an asset type on Jet Protocol?
  • Yes
  • No

0 voters

5 Likes

Thank you for this application @Bobby_StableNode!

I wonder if the polls at the bottom of collateral asset applications could be misleading. I noticed there have been polls on some of the other applications as well.

I suppose it’s good for community signal but it doesn’t guarantee anything as far as the governance review, on chain vote, or priority.

2 Likes

That’s true I should probably clarify that it is solely for community signaling. I will edit it to make it more clear

4 Likes

Thank you for the swift edit. Appreciate it Bobby! Excited to move forward with a new asset.

3 Likes

Props to @Bobby_StableNode for taking the lead on writing this up. Great read.

Like it or not, Tether is lifeblood in DeFi.

Jet Protocol would be kneecapping itself to not onboard it as a collateral type.

Onward & Upward.

4 Likes

The Governance Committee at Jet has completed a high-level review of this Asset Application and determined the asset as acceptable to continue with the Onboarding Application. This is not an endorsement of the asset from the Governance Committee.

To continue the onboarding process, we have launched a 7-day off-chain community sentiment poll to gauge the interest of onboarding this asset, as well as help facilitate the community discussion. Following the conclusion of the Poll, the Governance Committee will publish a summary of the CODEC assessment with a formal decision of allowing the Asset to move forward with the On-chain governance vote and potentially onboarding.

This Poll will run 7 days, and is used to gauge the interest of the Jet Protocol Community on Onboarding this asset as a collateral to Jet Protocol

POLL: Should $USDT be included as an asset type on the Jet Protocol?
  • Yes
  • No

0 voters

4 Likes

Dear Community Members:

Below we will detail the results of the $USDT-SPL Off-Chain Poll together with the community sentiment results. Along with this, we attach a summary of the CODEC evaluation that the $USDT-SPL asset has received from the Governance Committee.

We invite those users who have staked JET tokens to cast their vote in the On-Chain vote. Remember that in order to execute your vote you must have at least 1 (One) JET token deposited.

The $USDT-SPL On-Chain voting will be executed via the governance platform starting on 07/05/22 and will be live for the following 7 (Seven) days.

We appreciate your collaboration and invite you to participate in the upcoming proposals! For the latest information, visit our sites:

[Summary of CODEC Assessment ] - $USDT-SPL

The following summary exposes the key points from the $USDT-SPL Collateral Onboarding Domain Evaluation Criteria.

Overall, the Jet Governance Committee endorses $USDT-SPL to move forward with an On-Chain vote.

The full CODEC Evaluation Summary can be found here.

Click this link for the full version of the asset’s application.

Community Discussion Summary:

Despite not having achieved unanimity in the vote, $USDT-SPL application will move towards On-Chain voting to be listed as a collateral asset on Jet Protocol.

Community Vote Summary:

With 87% positive votes for the acquisition of $USDT-SPL as collateral in Jet, the Off-Chain proposal has resulted in: Yes.

2 Likes