Tether has chosen Kraken’s native Ethereum scaling solution, Ink, for the initial launch of its USDT0 token, as announced on Thursday.
USDT0 aims to create a cross-chain “unified liquidity layer,” simplifying the process of transferring USDT across the broader crypto ecosystem. It utilizes LayerZero’s Omnichain Fungible Token standard, which is designed to facilitate token minting and burning across various blockchains.
Tether remains the most widely used and liquid stablecoin in the market. Since Paolo Ardoino took over as CEO in late 2023, the company has embarked on various experimental projects, such as launching Bitcoin mining operations in El Salvador and forming an internal AI research team.
The new USDT0 token is part of Tether’s growth strategy and could serve to expand the liquidity and usability of Tether across multiple platforms.
Kraken, founded in 2011, has also been focusing on growth and innovation, embracing a “startup mode.” In October, the company announced company-wide layoffs aimed at removing unnecessary organizational layers to concentrate on product development and innovation. This shift in strategy is especially visible in Kraken’s Ink, an Optimism-based Layer 2 network that launched ahead of schedule in December. Despite being only a few weeks old, Ink has already seen several milestones, including joining the Optimism Security Council, launching a version of the Velodrome decentralized exchange, and being selected as the test platform for Tether’s new token.
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“We’re launching things quickly and experimenting a lot,” said Andrew Koller, a six-year Kraken veteran who led Ink’s development, speaking to The Block. He also highlighted the similarities between Kraken’s and Tether’s approach to innovation.
Koller explained that Tether is highly “security-focused” and usually waits months to ensure a blockchain meets their stability and security criteria before launching. However, due to Kraken’s strong reputation and the proven technology behind the OP Stack, the two companies decided to fast-track the deployment.
“Paulo and I got really creative about how to bring Tether to Ink,” Koller remarked, noting that no money was exchanged in the process.
“We have a solid reputation for security, and we integrate security experts at every level,” Koller added. “So when we’re testing the sequencer or stress testing, we do it together.”
In addition to enhancing liquidity for projects like Velodrome, Koller emphasized that USDT0 is expected to improve the user experience on Ink and other Layer 2 networks.
Will Canny is an experienced market reporter with a demonstrated history of working in the financial services industry. He’s now covering the crypto beat as a finance reporter