Tether Limited announced on October 24 that it has burned 500 million of its tokens. The deletion of the 500 million units of the stable coin thus follows an announcement of the company on its homepage.
Since October 24th, there is $ 500 million less in the market. The burning of the tokens announced Tether Limited on their Twitter page.
The corresponding blog post of the company states:
“Over the past week, Tether has redeemed a significant amount of USDT from its token offering. In this context, Tether will destroy $ 500 million from the Tether Treasury wallet and leave the remaining USDT (approximately $ 466 million) in the wallet as a preparatory measure for future USDT issues.
Conceptually, the USDT issue and redemption process is described in the White Paper, with the issues and redemptions being revealed by the observation of the USDT Treasury balance on the OMNI Blockchain. “
This ultimately means that recently someone has decided to redeem a high number of stable coins. As a reminder, anyone who owns USDT also has the company’s promise to get a “real” dollar for each USDT. Once this promise is demanded, the company must “burn” or dissolve the appropriate amount of token.
Tether burn – How does it work?
This works as follows: As soon as someone swaps USDT into Fiat, the Omni protocol creates the appropriate number of tokens. The metadata about it stores the log in a transaction on the bitcoin blockchain. Conversely, the principle is the same: if someone reclaims their dollars, the omni-protocol deletes the tokens again and stores the metadata over it again on the bitcoin blockchain.
What does that mean?
In the end, all that means is that $ 500 million has now been paid out to somebody (one person, one company, and / or several people). However, since the tether price on the stock exchanges is still less than one dollar, it also means that someone (one person, one company, and / or several people) could now arbitrage with the money, so take advantage of the price difference.
Categories: Crypto Currency