Tether, the world’s most used stablecoin, announced that they will be partnering with Algorand. Traders will now have the option to use the USD-backed stablecoin on the Omni, Ethereum, Tron, EOS, and Algorand blockchains. Regarding this collaboration, Paolo Ardoino - Tether CTO - said:
“Extending Tether into the Algorand ecosystem is a fantastic opportunity for us to further contribute to blockchain interoperability and collaboration. … We are very excited about the potential this enables for other projects in the decentralized ecosystem and we eagerly await working closely with many of them in the future.”
The Importance of Stablecoins
One of the most significant factors inhibiting the mainstream adoption of cryptocurrencies is its price volatility. Think about it, if the price of an asset fluctuates continuously, why would someone want to own it? This is why stablecoins are a critical part of this ecosystem. Fiat-collateralized stablecoins will act as a simple portal into the crypto world for both institutions and investors.
Traders and Exchanges extensively use Tether to conduct various trades:
- Traders don’t need to exchange back into dollars with each trade, which can be highly inconvenient. Plus, they also have the option to store a portion of their portfolio in stablecoins to protect their assets.
- Exchanges can easily transfer funds between each other without having to resort to fiat currencies, which could be a logistical and compliance nightmare.
- Scalability: Blockchain platforms are not scalable or fast enough to support a large amount of transactions.
- Finality: Finality means that once an operation has been executed, it cannot be reversed. Unfortunately, the current blockchain platforms do not provide 100% finality.
Led by Turing award winner, Silvio Micali, Alogrand is a public, permissionless, proof-of-stake blockchain that is currently working on creating a borderless global economy. Algorand’s inherent design and architecture enables it to easily conduct 1000 transactions per second and a block production time of 5 seconds per block. To put those numbers into perspective, Ethereum manages <25 transactions per second and has a block production time of 15 seconds.
On top of that, Algorand’s pure proof-of-stake protocol ensures 100% finality. Blockchains like Ethereum, which execute the proof-of-work protocol, are always susceptible to forking - i.e. when a blockchain diverges into two paths. The Algorand blockchain, on the other hand, can never fork due to a property called “immediate transaction finality.” You can go to the linked article to know more about this property, but to summarize - two blocks can never be added to the chain since a block can only be added after it receives the minimum amount of votes.
Conclusion: How Algorand and Tether can help each other
Algorand will provide a highly scalable platform for Tether function at its maximum capacity. On the other hand, Alogrand can leverage Tether’s immense popularity to attract more users and institutions to its platform. Not only will this increase the platform’s usage, but potentially bring in more developers and applications as well.
In the process, Tether has also become the latest high-profile project to collaborate with Algorand. The well-known decentralized exchange, IDEX, announced that they’d be partnering up with Algorand to create a new version of their exchange. Algorand will also be collaborating with promising projects like AssetBlock, Reach, DUST Identity, and established organizations like the World Chess Federation and the Italian Society of Authors and Publishers. Its native token, ALGO, has also been listed on multiple exchanges like Binance, CoinBasePRO, Huobi, Kraken, and several others.
Posted from my blog with SteemPress : https://cryptohype.tech/tether-launches-stablecoin-usdt-on-algorands-next-generation-platforms/