Polygon, a scaling solution for Ethereum, announced the shift to the USDT0 standard, enhancing liquidity for stablecoins.
What are USDT0 and XAUt0?
USDT0 and XAUt0 are cross-chain stablecoins that are not directly backed by assets but are minted by depositing USDT or XAUT into a specific contract on Ethereum. As co-founder Lorenzo R explained, "USDT0 works on top of the core Tether infrastructure, allowing users and chains to access their USDT tokens on their desired networks."
Reasons for Choosing Polygon for Integration
According to Lorenzo R, Polygon was chosen for scaling the USDT0 ecosystem because it has grown into one of the strongest ecosystems for stablecoin payments, decentralized finance, and enterprise adoption. "Polygon provides the scale and community needed to make USDT0 the de facto transfer standard," he added.
Impact on the Stablecoin Market
The launch of USDT0 on Polygon marks a significant event in the stablecoin market, where Tether’s stablecoin has surpassed a market cap of $167 billion by mid-August. According to CoinGecko, XAUt0's market cap is $2.5 million, while USDT0 reached $1.6 billion in just two months.
The integration of USDT0 and XAUt0 into the Polygon network signifies an important step towards enhancing cross-chain liquidity and introducing gold into the world of decentralized finance.
