USDT Expansion Strategy: Multi-Chain Layout and Ecosystem Construction

As the largest stablecoin by market capitalization, USDT’s market value has grown from 80 billion USD to 144 billion USD over the past year, an increase of 80%. Despite this, its market dominance has decreased from 70% to 61%, as other stablecoins are also rapidly expanding. To maintain its growth momentum, USDT has adopted an aggressive cross-chain expansion strategy.

Challenges Facing USDT Expansion

chain support is limited

USDT currently natively supports about 12 blockchains, but is actually present on over 80 chains. Among them, USDT on more than 50 chains is valued at over 1 million USD, and 17 of the top 30 chains rely on bridged versions. This means that most USDT on the chains is issued by third-party bridges rather than directly by Tether, which carries additional risks.

Increase in USDT bridging

Approximately $8 billion of USDT has been bridged to other chains on Ethereum, with around $5.2 billion minted through bridges on BSC. Major Layer 2 networks such as Arbitrum and Polygon operate their own USDT bridges. This fragmentation makes it difficult for Tether to track the total supply and manage risks.

value loss

98% of transaction fees and 99% of transactions on Tron are driven by USDT, bringing huge profits to Tron. If Tether launches its own blockchain, it may redirect these network activities and profits.

Tether’s Response Strategy

Horizontal scaling:USDT0

Tether has launched a multi-chain version of USDT0 based on LayerZero OFT, which can easily scale to more chains. USDT0 simplifies supply management across different networks and reduces cross-chain transfer costs.

Vertical Scaling: Legacy Mesh and Plasma

Legacy Mesh connects existing USDT deployments with USDT0 as a central network, unifying 98% of the USDT supply. Plasma focuses on payment efficiency as a Bitcoin sidechain. Together, these two projects create a comprehensive liquidity and ecosystem hub for USDT.

The Importance of Interoperability

As the blockchain ecosystem continues to expand, stablecoin issuers need to develop cross-chain strategies for long-term growth. Solutions like LayerZero provide an efficient way for stablecoins to enter new markets. Interoperability has become a key first step in the expansion strategy of stablecoins.