Tether burns more than it prints: 740 mm burned, 200 mm minted
USDT has been considered the go-to stablecoin, but the stablecoin has been accused of being part of illicit activities by market watchers due to exuberant minting. Tether printers are back at it as the month of October noted eleven instances of Tether treasury minting the stablecoin, followed by contentious swaps and transfers.
Tether was off to a good start: on October 4, the treasury minted 5 million USDT, followed by 20 million on October 7. Even though the 5 million USDT was issued on EOS, there was no data in the public domain available to understand the reason behind minting of the 20 million USDT. There were nine more instances of USDT minting, bringing the total minted USDTs to 211,987,000 in October. This data was reported by Whale Alert on Twitter.
However, as per the trend, most Tether minting took place from October 25 to October 30. Paolo Ardoino, the Chief Technology Officer of Bitfinex and Tether informed the community that most minting of USDT was a part of certain Chain swaps like Omni to Tron and ERC20 to Tron. Ardoino also asked Whale Alert to deploy a system to detect chain swap. He added:
“Average chain swap is > 10M
My suggestion is to build an algo that detects chain swaps: one leg incoming to a treasury on chain 1, one leg outgoing from treasury on chain 2.”
Whale Alert also indicated burning a total of 740 million USDT, which was clarified by Tether’s account claiming that the move of 370 million was “part of its Omni authorized but not issue pool to the issuance address in order to burn/revoke them.” According to a blog provided by Tether explaining the chain swap, Tether mints the requested demand from the client if its treasury wallet lacks the required fun in that particular blockchain.
“After this transfer is completed, we either burn the same amount of USDt tokens on the initial blockchain or retain these tokens in our treasury wallet on the initial blockchain to be used for future chain swaps with our clients.”