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Tether Ditches Solana, Performs $1 Billion USDT Swap

In a backwards move for the Solana community, stablecoin provider Tether is set to switch 1 billion USDT on Solana for ERC20 tokens for usage on Ethereum

After the news, the cost of SOL fell approximately 0.03%, with the Total Value Locked on Solana’s DeFi procedures down 10.95% to $29773 million, according to DeFiLlama.

According to Tether, the swap will accompany the aid of a 3rd party. Prior to the swap, Solana held $ 1.8 billion worth of USDT, Ethereum $28 billion, and Tron about $34 billion. Tether’s stablecoin is readily available on Avalanche, Tezos, Algorand, Near, Polygon, Omni, EOS, Liquid, Statemint, SLP, and Statemine.

With the newest swa p, Solana will now hold about $1.7 billion USDT.

USDT swaps discussed

On-chain swaps are utilized to move USDT from one blockchain to another. The exchanges’ clients can transfer their Tether on a blockchain like Tron and withdraw the funds on another blockchain like Ethereum.

Sometimes an exchange needs USDT to be moved from one chain to another to expand their USDT holdings equally. The exchange moves the USDT from the source blockchain into a Tether treasury wallet, from which it will be moved to the other chain.

On Nov. 17, 2022, Tether clarified that Alameda Research, the quant trading company with close links to collapsed exchange FTX, held USDT. Alameda paid Tether a comparable USD quantity for the USDT. Tether keeps the USD for purchasing liquid security like U.S. Treasuries. The only method for Alameda to liquidate their USDT is through Tether’s redemption procedure. Alameda does not hold Tether’s reserves on its balance sheet.

However, Solana had close links to FTX, and the SOL token has taken a pounding because FTX revealed its liquidity issues on Nov. 6,2022

The token has actually fallen approximately 65% from around $3730 that day to $1318 at press time. The overall worth secured the Solana DeFi environment has actually fallen 97% considering that its peak of about $1011 billion in Nov.2021 Numerous DeFi procedures on Solana likewise had direct exposure to FTX.

SOL TVL
SOL TVL|Source: DeFiLlama

Solana NFT market MagicEden just recently stopped assistance for Project Serum, a decentralized exchange developed by previous FTX CEO Sam Bankman-Fried. At press time, the SRM token is trading at $0.25

The Solana Foundation later on exposed in a Nov. 10, 2022, blog site pos t that it had $1 million in money or money equivalents secured in an FTX account when the exchange froze withdrawals. It likewise holds 3.2 million FTX Trading typical stock shares, 3.43 million FTT tokens, and $13454 million in SRM tokens. At press time, the FTT token is trading at a paltry $1.43, which indicates that much of the Foundation’s holdings have actually been erased.

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