Tether suspends Omni minting, signaling the comeback of Bitcoin.
Tether suspends Omni minting, Bitcoin comeback.
Author: Osato Avan-Nomayo, translated by: Shanouba, LianGuai
Tether has stopped providing USDT stablecoins on the Omni Bitcoin layer.
The issuer of USDT attributes their decision to the lack of users on the Omni layer.
Tether indicates that it plans to support a new Bitcoin scalable layer called RGB.
Tether announced on Thursday that it has stopped issuing USDT stablecoins pegged to the US dollar on the Omni, Kusama, and Bitcoin Cash SLP networks. The announcement adds that users of USDT on these affected platforms have one year to transfer their funds to other supported networks. The cessation of USDT usage on Omni is significant because the relationship between Tether and Omni can be traced back to the origins of the stablecoin issuer. Omni was the first layer to issue USDT in 2014 and remained the most popular until it was replaced by stablecoins on the Ethereum and Tron networks.
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What is Omni? What is its relationship with Bitcoin?
Omni is a layer built on top of Bitcoin in 2013, marking the first attempt to expand the blockchain network. Unlike Ethereum’s Layer 2 networks which are independent blockchains, Omni is a platform designed to introduce smart contract functionality to Bitcoin. This layer achieved some initial success as it was the place where the first token called Mastercoin was issued, which is considered the first altcoin.
In addition, Mastercoin provides another example of the connection between Tether and Omni, as Tether co-founders Brock Pierce and Craig Sellars were founding members of the Mastercoin Foundation. Sellars served as the foundation’s Chief Technology Officer.
Tether emphasizes that the reason for ceasing the issuance of stablecoins on Omni is the lack of users and the popularity of USDT on other chains. The supply of USDT on Omni is about $237 million, accounting for only about 0.29% of the total supply of USDT in circulation on all supported chains. The liquidity on other affected networks is much lower. The supply of USDT on Kusama and Bitcoin Cash SLP is $1.4 million and $987,000 respectively.
However, on Tron, the supply of USDT is the highest, even surpassing Ethereum. The supply of USDT on Tron is $43.5 billion, accounting for nearly 50% of the total supply of this stablecoin. The popularity of USDT on Tron is largely driven by users in developing countries in Latin America, Africa, and the Middle East, where the low transaction fees on this network make it an ideal choice for trading.
The association between Tether and Bitcoin is not over
Tether states that ceasing the usage of USDT on Omni does not mean the end of its relationship with Bitcoin. The stablecoin issuer adds that it will resume USDT on the Bitcoin layer if there is more user activity in the future. Tether also highlights RGB as another frontier in utilizing its stablecoin on Bitcoin. RGB is similar to Omni as it is another attempt to improve Bitcoin scalability. It is a smart contract system integrated with the Bitcoin Lightning Network.
“RGB is a scalable and confidential smart contract system for Bitcoin and the Lightning Network, which allows the creation of products and services on Bitcoin without the need for new tokens like Ethereum,” said a representative from Portico Labs, the developer of the decentralized exchange on the Lightning Network, to DL News.
Tether plans to issue USDT on RGB, stating that this will allow users to “witness USDT on another super powerful and scalable Bitcoin layer.” For Portico Labs, the emergence of RGB will be the end of other blockchains, a bold claim often advocated by Bitcoin purists. Meanwhile, Tether states that market forces will determine which blockchain is most favorable for value transfer in the crypto economy.