A new version of the widespread but controversial stablecoin tether (USDT) is launched on Blockstream’s Liquid Network.
The token’s addition to Liquid’s bitcoin sidechain network, announced on Monday and launched last October, brings new functionality to bitcoin traders and businesses that can be accessed through Tether Ltd.’s original platform. are not available.
Liquid was developed as an additional layer to the Bitcoin blockchain to provide the ability to process large volumes of transactions at a higher speed. At the start, a number of industry companies, including Tether’s sister company Bitfinex, had already signed up to support the management and transaction of the network using the Bitcoin-linked L-BTC token.
With Tether’s entry into the network, it will now be possible to conduct atomic swaps between Liquid BTC and Liquid Tethers, a feature that the companies say offers lower counterparty risk for those doing OTC trades. Additionally, Liquid’s shorter blocking times allow traders to quickly complete fiat transfers between exchanges, resulting in more efficient arbitrage deals.
In terms of asset storage, Blockstream Green, the company’s wallet offering, enables holders to idle Liquid USDT and bring it to exchanges when trading. The wallet app was redesigned in March to include new features such as multi-signature security and data protection over the Tor network.
Previously, Green was a bitcoin wallet and was updated in early July to support liquid bitcoin and assets issued.
The press release also suggests that the Trezor hardware wallet will support the assets “soon”.
“Given the fantastic work the Blockstream team is doing, it was a natural decision to use Tether on the Liquid Network,” said Paolo Ardoino, CTO at Tether and Bitfinex. “Spending stablecoins and various other digital assets under a blockchain platform makes a lot of sense and greatly improves the efficiency of the industry while allowing merchants to manage all of their assets from a single wallet application.”
Looking ahead, companies say that with the potential launch of lightning network support for Tether, “instant, low-cost stablecoin payments” could be on the way. With Lightning, liquid-based payment channels can already be created.
With the launch, Liquid USDT will be supported with deposits and withdrawals at Bitfinex, while Liquid member companies are working on adding the token, according to a press release.
Samson Mow, CSO at Blockstream, said:
“The addition of Tether is an important milestone in increasing the usefulness of the Liquid Network. Combined with the latest developments in the liquid ecosystem, traders can now achieve some really cool things like OTC atomic swaps, super-fast arbitrage between exchanges, and easy tethered custody with Blockstream Green. “
While Tether tries to peg the value of the USDT token to the US dollar, the firm’s attorney recently admitted that only 74 percent of the stablecoin was backed by fiat equivalents as of April 30. Tether and Bitfinex are currently involved in a lawsuit with New York’s attorney general.
Adam Back image via CoinDesk Archive