How USDT (stablecoins) work?

[a298b112]

I am trying to understand how USDT (or any other stablecoins) work. Is it true that USDT is just a contract on Ethereum? If it is true, then do we know its address? And another question is, how Teather emit new USDT whereas the contract can't be changed?

[cryptoaddictchie]

I am trying to understand how USDT (or any other stablecoins) work. Is it true that USDT is just a contract on Ethereum? If it is true, then do we know its address? And another question is, how Teather emit new USDT whereas the contract can't be changed?

Usdt is a known stablecoin and minted as erc20 and live on ethereum network. But I believe there are usdt already on other chain too.

Here: https://www.coingecko.com/en/coins/tether

Youll find all the contract address supported on different blockchain for tether.

There is no need to change contract address when tether is being minted. It will be fixed and not change. If you found a newly minted usdt with different contract address then thats a scam.

[Charles-Tim]

But I believe there are usdt already on other chain too.

Yes, plenty of them like Omini layer, TRC20, Algorand, Solana and some other chains.

@a298b112. To know more about the smart contract addresses, you can check it on their official site: https://tether.to/en/supported-protocols/

[noorman0]

Is it true that USDT is just a contract on Ethereum?

Yes, but USDT has many network versions, not just ERC20.

If it is true, then do we know its address?

Yes, you can see in cmc > contracts > more

And another question is, how Teather emit new USDT whereas the contract can't be changed?

I'm poor on technical matters, afaik you can set the contract code to "mintable" thus allowing the number of tokens to be unlimited without changing the contract.

[owlcatz]

This may be helpful.

https://www.coindesk.com/learn/2022/06/01/what-is-tether-how-usdt-works-and-what-backs-its-value/

[a298b112]

I am trying to understand how USDT (or any other stablecoins) work. Is it true that USDT is just a contract on Ethereum? If it is true, then do we know its address? And another question is, how Teather emit new USDT whereas the contract can't be changed?

Usdt is a known stablecoin and minted as erc20 and live on ethereum network. But I believe there are usdt already on other chain too.

Here: https://www.coingecko.com/en/coins/tether

Youll find all the contract address supported on different blockchain for tether.

There is no need to change contract address when tether is being minted. It will be fixed and not change. If you found a newly minted usdt with different contract address then thats a scam.

Even on Bitcoin network? It doesn't have smart contracts as far as I know

[Eternad]

I am trying to understand how USDT (or any other stablecoins) work. Is it true that USDT is just a contract on Ethereum? If it is true, then do we know its address? And another question is, how Teather emit new USDT whereas the contract can't be changed?

Don’t make it too complex, Tether(USDT) is a centralized token. Token is not being mine but through minting. The developer has the power to mint, freeze or burn any token because it was designed that way since it was backed by fiat as collateral which means it’s supply will varies depends on the value of USD in there treasury.

USDT doesn’t work like Bitcoin, Ethereum or other token that is decentralized. Tether devs can print billions of USDT out of thin air that’s why it always subject for being a scammy stablecoin.

[Hamza2424]

USDT is the most Shaddy Stablecoin in my view as this coin has the riskiest reserves unknown bonds and much more the transparency of the reserves makes a good stable coin in my view, USDC is one of the good Stable coins DAI is another type of option but USDD by TRX is same like UST so I can't say anything I am sure USDT can lead crypto to a major loss due to their wrong reserve policy.

[TimeTeller]

USDT is the most Shaddy Stablecoin in my view as this coin has the riskiest reserves unknown bonds and much more the transparency of the reserves makes a good stable coin in my view, USDC is one of the good Stable coins DAI is another type of option but USDD by TRX is same like UST so I can't say anything I am sure USDT can lead crypto to a major loss due to their wrong reserve policy.

When I read about this regarding USDT, I always remember the fact that way back in 2019,
USDT team admitted that they were not fully backed by then.
So at the moment, how sure we are that they are now staying true to the amount of their assets?
This is why even if USDT is one of the most common used stablecoin, you should not hold it long term,
because not only that they can freeze your account, but they are also vulnerable to possible losses.
But always check the contract address from the links provided above, some scammers can lure people to fake ones.

[tabas]

But I believe there are usdt already on other chain too.

Yes, there are too many of them and it's written on their website and OP can check that to understand more about it. But here's what they have for the blockchains that has USDT on it.

[....]

Tether tokens exist as digital tokens built on several leading blockchains, including Algorand, Avalanche, Bitcoin Cash’s Simple Ledger Protocol (SLP), Ethereum, EOS, Liquid Network, Omni, Polygon, Tezos, Tron, Solana and Statemine. These transport protocols consist of open source software that interface with blockchains to allow for the issuance and redemption of Tether tokens.

[....]
Tether on the Ethereum blockchain, as an ERC20 token, is a newer transport layer, which now makes Tether tokens available in Ethereum smart contracts or decentralized applications on Ethereum. As a standard ERC20 token it can also be sent to any Ethereum address.

Even on Bitcoin network? It doesn't have smart contracts as far as I know

To understand it easily, being on bitcoin's network and issued through Omni Layer, which is just another network just like the others (ERC20, TRC20, etc.)

The Omni Layer acts as a bridge between altcoins, smart contracts and smart properties and the Bitcoin blockchain.

[Bitcoin_Arena]

Even on Bitcoin network? It doesn't have smart contracts as far as I know

USDT is uses the bitcoin omni layer. Just like you see the name, it's just a layer on top of Bitcoin blockachain which enables creation of tokens like USDT unlike the actual Bitcoin network layer where it is not possible.
So Bitcoin blockchain is layer 1
Omni layer is layer 2
Liquid network is also layer 2

[dansus021]

Usdt is a known stablecoin and minted as erc20 and live on ethereum network. But I believe there are usdt already on other chain too.

yes right know tether not just live on eth only but 14 Chain including Layer 1 and Layer 2 Chain like polygon(but there is none in there ) and you guys can see all here https://tether.to/en/transparency/

since stablecoin should be transparent and we dont want Luna crash happen again

and tether not just issued USD stablecoin but the other coin as well including EUR, CNY, and MXN and last is GOLD

[antsam]

I think it is very clear that a stablecoin coin means that there is already a stabilizing guarantor instrument, either gold or fiat. What I've read is that USDT is backed up by Fiat funds stored in the bank as a guarantee for every transaction

[a298b112]

What I've read is that USDT is backed up by Fiat funds stored in the bank as a guarantee for every transaction

this is it! can it be audited? was it audited?

[Kemarit]

I am trying to understand how USDT (or any other stablecoins) work. Is it true that USDT is just a contract on Ethereum? If it is true, then do we know its address? And another question is, how Teather emit new USDT whereas the contract can't be changed?

Usdt is a known stablecoin and minted as erc20 and live on ethereum network. But I believe there are usdt already on other chain too.

Here: https://www.coingecko.com/en/coins/tether

Youll find all the contract address supported on different blockchain for tether.

There is no need to change contract address when tether is being minted. It will be fixed and not change. If you found a newly minted usdt with different contract address then thats a scam.

Even on Bitcoin network? It doesn't have smart contracts as far as I know

No, Bitcoin network is different, they are separate entity from Tether.

I'm not sure if this is what you are looking for, but there are traders who convert from one crypto to another. So you can exchange your Bitcoin->USDT.

And I think you got the answers already, they have provided a lot of good link, its time for you to read them up and understand.

As for the Audit, this the a good link: https://blockworks.co/tether-pushes-back-timeline-on-audit-report/

[TravelMug]

What I've read is that USDT is backed up by Fiat funds stored in the bank as a guarantee for every transaction

this is it! can it be audited? was it audited?

Audited in terms of their back up funds? Yes, this is the big question on Tether for many years and if I'm not mistaken the New York Atty General has initiated this investigations and then Tether doesn't want to cooperate at that time. It steam from the rumors that they don't have the funds to back up 1:1 the US dollar and that's why many question Tether to the point of calling them a scam. But so far, since then they have proven that they are a solid coin and now the biggest stable coin in the market.

[coinerer]

I am trying to understand how USDT (or any other stablecoins) work. Is it true that USDT is just a contract on Ethereum? If it is true, then do we know its address? And another question is, how Teather emit new USDT whereas the contract can't be changed?

USDT is a stable altcoin. it id developed by almost all blockchain like Erc20, trc20, polygon etc. But Tron USDT is a very popular and users use this chain very much for low transcation fees. USDT haven’t any own chain for survive on the crypto market by therer own power. USDT totally depend on another network ecosystem. but i think USDT is still safe stable coin like BUSD & USDC

[cryptoaddictchie]

What I've read is that USDT is backed up by Fiat funds stored in the bank as a guarantee for every transaction

this is it! can it be audited? was it audited?

Im not sure if usdt is backed by fiat but I believe its also the same with luna which backed by assets such as btc eth and many more. But usdc and busd stablecoin is backed by fiat fund. Usdt has a lot of backing and not just will crash like what happened on ust, but if theres a big whale who can challenge their backing who knows its not possible to collapse too.

[vv181]

how Teather emit new USDT whereas the contract can't be changed?

It is indeed specifically that the contract can not be changed, but, within the contract, there is a function that is able to adjust or readjust the total token supply automatically, and a function for creating and deleting a token(s). That special privilege is given to the owner of the smart contract, so it does not mean the smart contract explicitly can't be changed.

If you look around regarding the term of minting or burning, that is the part where how the USDT get "emitted".

[Humility4sure]

I've read several articles about usdt and most suggested that usdt isn't as good as it seems. The idea we are made to believe is that usdt has an equivalent of the amount printed backed in fiat, bonds, gold and other valuables but in real fact this may not be the case. This implies that we need to be careful and avoid holding it for too long as it's not a 100% valid store of value as indicated.