USDT has become the dominant stablecoin, growing its market cap from $80 billion to $144 billion in the past year, but its market dominance has declined from 70% to 61% as other stablecoins expand.
- Tether USDT natively supports only about 12 blockchains, while bridged versions of USDT are present on over 80 blockchains, introducing additional risks and management challenges due to reliance on third-party bridges and lack of direct oversight by Tether.
- Tether is addressing expansion challenges through horizontal strategies like USDT0 (a multichain token using LayerZero OFT for cross-chain transfers) and vertical strategies such as backing the Legacy Mesh in Arbitrum and Plasma (a Bitcoin sidechain), aiming to unify liquidity and build a dedicated ecosystem.
- As stablecoin issuers expand, interop has become the first step toward expansion. LayerZero, offering customizable infrastructure and wide blockchain support, serves as the leading entry point for this cross-chain growth strategy.
