Distinctive features of USDT
Since USDT is a stablecoin, it cannot be directly compared to other cryptocurrencies. In this article, we will look at what distinguishing features are inherent in the Tether coin.
Now most transactions are carried out digitally. E-money held in bank accounts is used as settlements. But in the calculations they involve an intermediary in the form of a financial institution. And this requires the payment of additional fees and is fraught with the blocking of funds due to legal restrictions. Therefore, Tether launched an analogue of fiat currency on the blockchain. Consider the distinctive features of USDT that make this token a universal means of payment in the electronic world.
What is the uniqueness of the USDT currency
Compared to tokens that are not backed by tangible assets, the USDT crypto has the following unique features:
- Its exchange rate is constantly in full accordance with the dollar exchange rate. If you look at historical data on special services, you can find small fluctuations. But they always remain within thousandths of a dollar. That is, the deviation is from 0.9903 to 1.03.
- The issue of the token and the number of destroyed coins are not limited. Tether releases USDT when replenishing assets and destroys them when retired. Therefore, there are no problems with security and liquidity.
- USDT is not affected by events that lead to a sharp drop or rise in the rate of other cryptocurrencies. Since these tokens are backed by tangible assets, the balance of supply and demand does not affect the formation of value, including attempts to artificially rock the market.
- Most of the coins are stored on cryptocurrency exchanges. These platforms account for about 70% of all generated tokens. The first position is occupied by Binance. As of the end of last summer, there were more than 16 billion tokens on the accounts of this platform.
- Base pairs with USDT are more popular on cryptocurrency exchanges. More than 60% of the total trading volume falls on them. Moreover, this growth has been observed in the last 3 years. Previously, the leadership was occupied by bitcoin, as well as fiat dollars. During the past year, BTC transactions accounted for only 15% of total trading volume.
- Stablecoin is suitable for use in decentralized finance. For example, derivative financial instruments are already available, in which the Tether token acts as collateral.
Therefore, if other cryptocurrencies can be seen as an opportunity to invest and earn money quickly, USDT is suitable as a means of settlement and capital storage.