What is Tether and what is the use of Tether
Categories: Crypto News US
What is Tether and what is the use of Tether?
Tether wasthe first cryptocurrency marketed as a stablecoin — a breed of crypto known asfiat-collateralized stablecoins. The value of the tether is pegged to a fiatcurrency — in this case, the U.S. dollar. Tether is the world’s largeststablecoin; in 2022, the majority of cryptocurrencies traded using tether.
Likeother stablecoins, tether is designed to offer stability, transparency, andlower transaction fees to users. Tether was not meant to be a speculativeinvestment like some cryptocurrencies; originally, investors who wanted to avoidthe extreme volatility of the crypto market used USDT.
Tether ispegged to the U.S. dollar (which is why the ticker is USDT), and it allegedlymaintains a 1:1 value with the dollar, although this claim has come under somescrutiny.Many believe that Tether is the lifeblood of the cryptoecosystem. They’re concerned that if Tether implodes, then the entire systemwould crash.
In May 2022,that’s exactly what happened: Tether lost its peg to the dollar briefly, andall cryptocurrencies plummeted. In part, this was a result of anotherstablecoin, terraUSD (USD) falling below 30 cents. The wave of panic in thebroader crypto market was palpable. Because of this crash, many cryptoinvestors tried to redeem their tethers, others tried to exit the asset class altogether,and many lost their investments.