Tether announced a swap, as a result of which the company converted $1 billion USDT stored on the Solana blockchain, transferring its stablecoins to Ethereum
The issuer of the USDT Tether stablecoin announced the commission of a large-scale swap between blockchains. The company converted $1 billion of its USDT stablecoins stored on the Solana blockchain into the ERC20 token format based on the Ethereum blockchain.
As an initial reaction to this news, which became known on the evening of November 18, the SOL coin rate weakened by about 0.03%, and the total value of assets blocked in Solana DeFi protocols decreased by 10.95% to $297.73 million, according to DeFiLlama.
Similar on-chain swaps are made to transfer coins from one blockchain to another. As a result, the user can deposit Tether coins to his account on one blockchain (for example, Tron), and withdraw them from another blockchain (for example, Ethereum). Sometimes this is a requirement of the exchange for a more even distribution of USDT reserves. The swap between blockchains is carried out through the Tether Treasury wallet.
Tether has carried out such swaps between blockchains before. So, in mid-2020, the project converted stablecoins from Tron to Ethereum twice. Both times the amounts also amounted to $1 billion.
Nevertheless, in this case, the interest of the community is attracted by the fact that we are talking about the Solana blockchain, known for its close ties with the collapsed FTX and Alameda ecosystem.
Recall that recently, the Binance crypto exchange, without explanation, first curtailed (and later resumed) the acceptance of USD coin (USDC) and tether (USDT) stablecoins based on Solana. A week earlier, a cryptocurrency company stopped accepting stablecoins based on Solana Crypto.com , hinting at the collapse of the FTX crypto exchange, which actively supported Solana. Also, deposits in stablecoins on Solana were turned into OKX (formerly OKEx).
All these events have already had a painful impact on the SOL coin price, which was at risk due to the collapse of the FTX. Last week, the coin of the Solana ecosystem fell by about 40% in just a day, falling to 1.5-year lows. This turned out to be twice as much as most major currencies, with the exception of the FTT token itself.
At the time of writing, SOL was trading, according to CoinMarketCap, around $13, although at the beginning of this month, the coin confidently held above the $30 mark. Since November 6, when the Bankman-Fried empire began to tumble down, the coin has fallen in price by about 65%.
The total value of assets blocked in Solana DeFi protocols (TVL), according to DeFiLlama, has fallen by 97% from the highs recorded in November 2021 above $10.11 billion.