Tether USD (Avalanche)

USDT.e

USDT.e is a bridged version of USDT on Avalanche. USDT is a centralized stablecoin backed by USD reserves held by Tether.

Risk Rating
Average
$1.00
0.09%
Summary
What we like
Provides easy on-ramp and off-ramp to convert your USD into digital dollars that is backed 1:1 by underlying reserves.
What we like less
USDT.e bridged through the Avalanche bridge requires more trust assumptions as the bridge depends on external validators. USDT also has questionable collateral backing and Tether controls the minting and redemption of USDC. Open to censorship as Tether can blacklist any USDT address at will.
What it means for you
USDT is a highly liquid instrument to hedge your portfolio in volatile market conditions and also an easy way to put USD to work for you in DeFi.
Information
Blockchain
  • Avalanche
Info
Key Metrics
  • Volume (24H): $2.8M
  • ATH: $1.25 (05/15/2022)
  • ATL: $0.86 (04/01/2022)
Risk Assessment
Average
Asset Strength

USDT.e is a large-cap asset with questionable collateral reserves. This asset depends on a centralized entity for custody services. This asset is exposed to the underlying risks of Avalanche bridge, a protocol rated as Risky. USDT.e on Avalanche is backed 1:1 by USDT locked in the Avalanche bridge protocol on the Ethereum chain. USDT is fully redeemable for its USD reserves, providing an effective mechanism to retain the peg to $1. The asset has an uncapped supply but has inflation control or burn mechanisms in place.

USDT.e is a stablecoin that consistently trades within 10bps of its peg to USD, which makes it a great store of value.

Asset Volatility

USDT.e is a stablecoin that consistently trades within 10bps of its peg to USD, which makes it a great store of value. USDT is fully redeemable for its USD reserves, providing an effective mechanism to retain the peg to $1.

Dependencies

Avalanche Bridge

Things to know about USDT.e

Who invented USDT?

USDT launched on the Ethereum mainnet in July 2014 by Brock Pierce, Craig Sellars and Reeve Collins. Tether is one of the earliest stablecoins created that pioneered the fiat-collaterlization model that is widely used today. Tether based out of Hong Kong is the sole entity responsible for creating and redeeming tokens as well as maintaining the 1:1 reserve backing.

How does USDT work?

USDT are backed 1:1 by USD reserves held with a licensed custodian (Tether). The process of minting USDT tokens requires a KYC registration process with Tether. After receiving approval from Tether's compliance team, the user sends USD to Tether's bank account. Tether then uses the USDT smart contract to mint an equivalent amount of USDT. Lastly, the newly created USDT are sent to the user's on-chain address, while the deposited USD are held in reserve. The process for redeeming USDT back into USD is the same process but reversed.

How secure is USDT?

USDT is a centralized stablecoin that relies on a proof-of-reserve system to ensure its reserve assets match its circulating supply. However, the token has faced significant controversy since its inception due to its failure to provide audited reserve attestations by an independent auditor and its reserve reports does not specify the exact underlying assets. The reserve composition of USDT is considered riskier as it consists not only of cash and cash equivalents but also other assets and receivables from loans made by Tether to third parties. Further, USDT has the ability to "blacklist" any of its associated addresses at will. When a USDT address is blacklisted, it can no longer receive USDT and all of the USDT controlled by the address can no longer be trasnferred on-chain.

USDT.e Pools