Time for Some Spring Cleaning: Tether Says Goodbye to USDT on Five Blockchains
Hi everyone, John here! Welcome back to the blog where we make the world of crypto easy to understand. Today, we’re diving into some news from a huge player in the crypto space called Tether. They’ve decided to do a bit of digital tidying up, and it’s a great opportunity for us to learn how some of this stuff works behind the scenes.
Don’t worry, as always, my wonderful assistant Lila is here to ask the questions you might be thinking. Let’s get into it!
“Hi, John! I’m ready. I saw the headline, and words like ‘sunset’ and ‘discontinue’ sound a little serious. I’m curious to find out what’s really happening.”
Exactly, Lila! It sounds more dramatic than it is. Let’s start from the beginning.
First, What is This “Tether” or “USDT” Thing?
Imagine you’re in a giant digital arcade. To play the games, you can’t use your regular dollars. You have to go to a counter and exchange your dollars for arcade tokens. Let’s say one dollar gets you one token. These tokens are great because their value is stable—one token is always worth one dollar inside that arcade.
Tether, also known by its ticker symbol USDT, is kind of like that arcade token for the crypto world. It’s a special type of virtual currency called a stablecoin.
“Okay, hold on John. What exactly is a stablecoin?”
Great question, Lila! Most cryptocurrencies you hear about, like Bitcoin, have prices that go up and down all the time. A stablecoin is different. It’s designed to have a stable price because it’s “pegged” or linked to a real-world currency, usually the U.S. dollar. So, the goal is for 1 USDT to always be worth about $1. This makes it super useful for traders or for people who want to hold digital money without the wild price swings.
USDT on Different “Digital Highways” (Blockchains)
Now, here’s a part that can be a little tricky for newcomers. A cryptocurrency like USDT doesn’t just exist in one single place. It can exist on many different digital highways, which in the crypto world are called blockchains.
“A blockchain? I’ve heard that word a thousand times, but can you give me the simple version again?”
Of course! Think of a blockchain as a shared digital notebook that is copied and spread across thousands of computers. When a transaction happens, it’s written down as a new entry in every single copy of the notebook. Because it’s shared and verified by so many, it’s incredibly difficult to cheat or change the records. Each of these “notebooks” or “highways” has its own rules, speeds, and costs (transaction fees).
So, you can have USDT on the Ethereum blockchain, the Tron blockchain, and many others. It’s still the same USDT, just traveling on a different highway. Think of it like the Coca-Cola company. You can buy Coke in a glass bottle, a plastic bottle, or an aluminum can. It’s all the same Coke, just in a different container. The blockchains are the containers for USDT.
The Big News: Tether is Closing a Few Old Roads
Okay, now that we have the background, let’s get to the main news. Tether has announced that it’s going to stop supporting USDT on five of these blockchain “highways.”
The company calls them “legacy” networks, which is a polite way of saying they are older or not used as much anymore for USDT. Effective September 1, 2024, Tether will be stopping support for USDT on:
- Omni Layer
- Bitcoin Cash SLP
- Kusama
- EOS
- Algorand
“Whoa, ‘stopping support’ sounds scary! Does this mean if someone has USDT on one of those blockchains, their money will just disappear?”
That’s the most important question, Lila, and the answer is no, not if they act in time! Let’s break down what “stopping support” really means here. It has two main parts:
- No More New USDT: Tether won’t create any new USDT tokens on these five blockchains.
- Ending Redemptions: This is the key part. “Redeeming” is the process of going directly to Tether and swapping your USDT back for real U.S. dollars. After September 1st, you won’t be able to do that if your USDT is on one of those five networks. The announcement also says remaining tokens will be “frozen,” which means they will likely become unusable on those chains after the deadline.
This is basically Tether saying, “Hey everyone, these five highways are closing down soon. Please move your cars (your USDT) to one of our other, more popular highways before we put up the roadblocks!”
So, Why Are They Doing This?
According to Tether, this move is about focusing their energy and resources where they matter most. Maintaining support for USDT across many different blockchains costs time, effort, and money.
Some of these blockchains simply don’t have a lot of people using them for USDT anymore. The community has moved on to newer, faster, or cheaper blockchains like Ethereum and Tron for their USDT transactions.
Think of it like a bus company. If they have a route where only one or two people get on the bus each day, it’s not very efficient to keep running that route. They would likely cancel that route to use the bus, the driver, and the fuel for a more popular route where hundreds of people are waiting. That’s essentially what Tether is doing—it’s a business decision to be more efficient.
What Should You Do If You Have USDT on These Networks?
If you’re a beginner, it’s unlikely you’re holding USDT on these specific blockchains, but it’s great to know the process. If you (or someone you know) do have USDT on Omni, Bitcoin Cash, Kusama, EOS, or Algorand, there’s a clear path forward.
The main goal is to move your USDT to a supported network before the September 1st deadline. Here are a couple of ways to do that:
- Use a Crypto Exchange: This is often the easiest way. You can send your USDT from your personal wallet on one of the old networks to a large exchange (like Coinbase, Binance, Kraken, etc.). Once it’s on the exchange, you can then withdraw it, but this time, you’ll select a supported network like Ethereum (ERC-20) or Tron (TRC-20).
- Use a “Bridge”: A cross-chain bridge is a special tool designed to move crypto from one blockchain to another. It’s like a digital ferry that takes your tokens across the water from one highway system to another.
The most important thing is to act before the deadline to ensure your funds remain accessible and usable.
Our Final Thoughts
John’s Take: To me, this is a sign of a maturing industry. In the early days, projects tried to be everywhere at once. Now, companies like Tether are making smart, strategic decisions based on data and user activity. It’s a housekeeping move that strengthens their focus on the blockchains where the vast majority of their users are. It’s a reminder that the crypto landscape is constantly evolving.
Lila’s Take: I have to admit, when I first heard the news, I was a bit worried! But after breaking it down, it makes a lot more sense. It’s not about people losing money, but about the company becoming more efficient. It really shows how important it is for anyone in crypto to pay attention to announcements from the projects they use. It’s like getting a notice that your local bank branch is closing and you need to move your account to the main branch downtown. As long as you get the notice and act on it, everything is fine!
That’s all for today! Hopefully, this clears up what’s happening with Tether and its stablecoin. It’s a perfect example of how a big, scary-sounding headline can be pretty straightforward once you look under the hood. Until next time, stay curious!
This article is based on the following original source, summarized from the author’s perspective:
Tether to sunset USDT redemptions on 5 ‘legacy’ networks
including Bitcoin Cash, Algorand