Tether growth is hitting new all-time highs across multiple blockchains, but the first protocol to support Tether is being left behind.
Omni Layer, built on Bitcoin, has suffered negative growth in Tether transactions for the last 12 consecutive months. Tether supply on Omni Layer has also fallen more than 50% over the same period, according to Coin Metrics.
Omni Layer’s Tether supply peaked in mid-2018 at just over $3 billion. Tether tokens first launched on Omni Layer in October 2014. While fluctuations in stablecoin supply and transaction counts happen regularly, it’s unusual for there to be a contraction in supply for months at a time, especially for Tether.
Omni Layer was the only one to support Tether for over three years until the stablecoin launched as an ERC-20 token on Ethereum in November 2017. In less than two years, Ethereum’s share of Tether’s total circulating supply eclipsed Omni Layer’s.
Disparate Tether growth across different protocols probably is due to “current demand on each chain,” said Sean Gilligan, developer at Omni Layer. Tether can move unused tethers on Omni Layer to another chain with higher demand by issuing a simple “revoke” transaction, Gilligan explained.
‘Crazy expensive’ reason for the move
Performance concerns across Tether-supported protocols seem to be driving demand on platforms like Ethereum and away from Omni Layer.
“I think it mostly comes down to Ethereum being much better payment rails for something like Tether and other stablecoins,” said Anthony Sassano, adviser to mStable, a stablecoin unification protocol.
Transaction fees and confirmation times were the primary reasons Tether decided to evolve its stablecoin into a cross-chain asset supported by multiple protocols, according to Paolo Ardoino, CTO…