TRON, a blockchain that aims to be the standard protocol for the development of decentralized applications, will be adding a US dollar-pegged token on its network.
The stablecoin partnering with the Tron Foundation is none other than Tether (USDT), the dominant stablecoin by market capitalization.
The partnership involves bringing Tether’s USDT coin, which is pegged to the value of a single US dollar, onto the TRON network by the end of Q2 2019.
Today we take the next step in our journey towards stablecoin mass adoption though the introduction of USDT on the @Tronfoundation blockchain.
Read more about how Tron has become the latest blockchain to deploy Tether here: https://t.co/UrVlDXmps6
— Tether (@Tether_to) March 4, 2019
Stability for Tron
The TRC-20 representation of one US dollar could prove to be a major step for the TRON network, as it will be fully compatible with TRON’s existing protocols — including its decentralized applications (dApps). This could prove to be vital for users and developers of dApps since the inherent volatility of cryptocurrencies has been a bottleneck for usage.
Tron has been known to be the go-to network for betting and casino-like applications. As the network has zero transaction fees, the number of transactions and active users has easily surpassed that of the Ethereum (ETH) network. However, with such a lax environment for transactions, it will be interesting to see how the USD-backed token will be used.
Usage for Tether
The move represents an interesting partnership for Tether as well.
While most of the USDT tokens are issued on the OMNI protocol, there is also an Ethereum-based variant in the form of ERC-20 USDT tokens. That, in itself, has been a pretty interesting development — although it doesn’t seem to be making too much of an impact in the Ethereum dApp scene. With Tether now launching TRC-20 based USDT tokens for TRON’s dApps, it will be interesting to see if this endeavor is more successful.
While Tether has frequently been embroiled in its own battle to prove the 1:1 US dollar backing of USDT, the attention has shifted away from the company following somewhat-questionable confirmation of its holdings.
At present, Tether is still the clear leader for its stablecoin transaction volume — but that market share could slowly dissipate as more institutions enter the space. Recently, JP Morgan confirmed the development of its own USD-pegged stablecoin, while Facebook is rumored to bring a digital currency for its users as well.
The collaboration with TRON could be a way for Tether to stay ahead of the upcoming competition in the cryptocurrency industry and maybe find new use cases for USDT. For TRON, USDT represents another tool to offer to its users for convenient usage of the network.
What do you think? Is this a symbiotic relationship that will help both networks reach new heights? Tell us your thoughts in the comments below!
Image courtesy of Twitter, Shutterstock.