- Tether has discontinued its USDT stablecoin on the Omni Bitcoin meta-layer.
- The USDT issuer blamed the lack of users on the Omni layer for its decision.
- Tether says it has plans to support a new Bitcoin scalability layer called RGB.
Tether has stopped issuing its US dollar-pegged USDT stablecoin on the Omni, Kusama, and Bitcoin Cash SLP networks, the company announced Thursday.
Users of USDT on these affected platforms have a year to move their funds to other supported networks, the announcement added.
Tether discontinuing USDT on Omni is of some significance as Tether and Omni’s relationship goes back to the stablecoin issuer’s origins.
Omni was the first layer for issuing USDT in 2014 and remained the most popular until it was overtaken by the stablecoin’s Ethereum and Tron network implementations.
What is Omni and what does it have to do with Bitcoin?
Omni is a meta-layer built on top of Bitcoin in 2013 and represents the first attempt to scale a blockchain network.
Unlike Ethereum layer 2 networks that are blockchains in their own right, Omni is a platform designed to introduce smart contract capabilities to Bitcoin.
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The meta-layer had some initial success as it was the home for crypto’s first initial coin offering for a token called Mastercoin, which is considered to be the first altcoin.
Mastercoin also offers another example of the links between Tether and Omni as Tether co-founders Brock Pierce and Craig Sellars were founding members of the Mastercoin Foundation. Sellars was the Foundation’s first chief technology officer.
Tether highlighted the lack of users on Omni and USDT’s popularity on other chains as reasons for discontinuing its stablecoin on the meta-layer.
USDT supply on Omni is about $237 million which is only about 0.29% of all USDT in circulation across all supported chains.
The other chains affected in Thursday’s announcement have much lower liquidity. USDT supply on Kusama and Bitcoin Cash SLP is $1.4 million and $987,000 respectively.
Tron accounts for the highest USDT supply, even eclipsing Ethereum. USDT supply on Tron is $43.5 billion which amounts to almost 50% of the stablecoin’s circulating supply.
USDT popularity on Tron is largely driven by users in developing countries in Latin America, Africa, and the Middle East where the network’s low transaction fees make it suitable for transactions.
Not the end of Tether’s association with Bitcoin
Tether said discontinuing USDT on Omni is not the end of its association with Bitcoin. The stablecoin issuer added that it would reinstate USDT on the Bitcoin meta-layer if it gets more user activity in the future.
Tether also pointed to RGB as another frontier for leveraging its stablecoin on Bitcoin. RGB is similar to Omni, as it is another attempt to improve Bitcoin’s scalability. It is a smart contract system that integrates with Bitcoin’s Lightning Network.
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“RGB is a scalable and confidential smart contracts system for the Bitcoin and Lightning Network, where it is possible to create products and services on Bitcoin without the need for a new token like on Ethereum,” a representative of Portico Labs, developers of the Portico decentralised exchange on the Lightning Network, told DL News.
Tether has plans to issue USDT on RGB with the company saying the move will let users “witness USDT on another super-powerful and scalable Bitcoin layer.”
For Portico Labs, RGB’s emergence will be the end of other blockchains, a bold claim often espoused by Bitcoin-only purists.
Meanwhile, Tether says market forces will decide the blockchains most favoured for the transfer of value in the crypto economy.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
