In a recent interview with Scott Melker, AKA the Wolf of All Streets, Tether CTO Paolo Ardoino spoke about the surprising volume of Tether’s stablecoin USDT on the Tron blockchain network.
Ardoino noted that a significant share of USDT volume occurs on Tron, which people don’t care much about. He suggested users are flocking to Tron because it offers fast and inexpensive transactions when they want to trade in digital dollars.
“I’m always surprised every time I see where the volume of USDT is happening because it’s seemingly the bulk of it is on Tron,” said Melker. He added that, at the end of the day, users care most about speed, cost, and using USDT for transactions.
According to Ardoino, the vast majority of USDT usage comes from centralized exchanges. Nonetheless, activity on blockchains like Tron represents a slice of transactions occurring outside centralized platforms.
Ardoino believes Tron has become so popular for USDT because it was on the market with layer 2 solutions before Ethereum. He said Tron has had a “four-year first mover advantage” since launching in 2018, while Ethereum’s layer 2 projects like Optimism and Arbitrum emerged later.
“It’s simple to use; it’s fast and cheap. Tron had four years before; we know there was a team on Tron in 2018,” said Ardoino. “Tron had four years of first-mover advantage before the first layer two on Ethereum came out.”
Due to its head start in scaling and low transaction costs, Ardoino believes Tron established dominance in usage for blockchain projects like USDT that require speed and high throughput. Critics argue Tron’s success is exaggerated. But its network effects continue to draw stablecoin usage.
USDT is a popular stablecoin pegged to the US dollar, used extensively in crypto trading and transactions. Tether issues USDT on several blockchains, including Ethereum, Tron, and others. USDT is the largest stablecoin, and its market cap stands at $86,155,638,841, according to CoinGecko.