In a tweet on May 17, Tether revealed its latest initiative to expand beyond Ethereum to add a ninth network option for traders to use. The launch is expected to occur in mid-June according to CTO Paolo Ardoino.
Escalating Ethereum network fees are likely to perpetuate this trend. Avalanche was chosen because it has support for Ethereum Virtual Machine (EVM). This allows DeFi protocols to easily migrate and also take advantage of faster transactions and lower fees. Tether already has an EVM-compatible system making it a good candidate for Avalanche.
The announcement elaborated:
“Avalanche has emerged as a hub in the nascent space of decentralized finance (DeFi). Avalanche is compatible with Solidity, a high-level object-oriented programming language, primarily used on Ethereum. This enables Ethereum developers to quickly build decentralized apps (DApps).”
State of the stablecoins
At the time of press, the total supply of Tether was close to an all-time high of 58.5 billion according to the Tether transparency report. Since the beginning of 2021, the USDT supply has surged by 178% from 21 billion on Jan. 1 to current levels and it still dominates the stablecoin market.
Of that total, around 27 billion (46%) is based on Ethereum. This total has been dwindling steadily over the past six months, however, as gas fees escalate.
There is now more USDT on the TRC-20 TRON network than there is on Ethereum with 31 billion, or just over 52% of the entire supply. Around 1.3 billion is on Omni and the rest is spread thinly over EOS, Liquid, Algorand, Solana, and the Bitcoin Cash Simple Ledger Protocol (SLP).
Tether’s closest competitor for stablecoin supremacy is Circle’s USD Coin (USDC), of which there is 16.8 billion in circulation according to CoinGecko. USDC has seen even bigger growth this year with a 330% increase since the beginning of 2021.
AVAX price reaction
Avalanche’s native token (AVAX) reacted strongly to the announcement with a 9% gain on the day to reach $37.53 at the time of press according to CoinGecko.
AVAX has made around 10% over the past month and has not been so rattled by the big marketwide correction. However, it’s still down from its all-time high of $59.40 on Feb. 10, 2021.