What is Tether?
Tether (USDT-USD) is the largest and most well known stablecoin; or a cryptocurrency pegged to the value of a large fiat currency, in this case the US Dollar. While it’s true that Tether operates on Omni chain, which is built on top of the Bitcoin (BTC-USD)(COIN)(OTCQX:GBTC) blockchain, that does not mean that you can trust it. So, how does Tether keep the value of one USDT at $1?
- Tether claims that all USDT are backed 1:1 by US Dollars.
- Tether uses arbitrage across exchanges to make it happen.
Number 1 is the primary source of concern, as many have called it into question.
What is the purpose of Tether?
According to the Tether homepage, Tether is “Digital money for a digital age.” But,