Tether has tapped crypto exchange Kraken’s native Ethereum scaling layer, Ink, for the first deployment of its USDT0 token, according to an announcement on Thursday.
USDT0 is looking to develop into a cross-chain “unified liquidity layer,” making transferring USDT across the crypto ecosystem easier. It uses LayerZero’s Omnichain Fungible Token standard, a relayer designed to mint and burn tokens on different blockchains.
Tether is the most liquid and most used stablecoin. Since Paolo Ardoino took over as chief executive in late 2023, the company has undergone massive experimentation — including launching bitcoin mining operations in El Salvador and an internal skunkwork AI research team.
The new Tether token is part and parcel of this period of growth, and could function as a way to spread Tether’s liquidity and useability.
Likewise, Kraken, founded in 2014, has doubled down on growth and “embraced startup mode.” In October, the company announced company-wide layoffs focused on shedding “organizational layers” as part of a conscious effort to focus on product launches and innovation, after hiring co-CEO Arjun Sethi.
Nowhere is this more apparent than in the exchange’s Optimism-based Layer 2 Ink, which launched in December months ahead of schedule. Less than a month old, the network has seen a number of advancements, including being accepted to the Optimism Security Council, launching a version of the Velodrome decentralized exchange and being a testcase for Tether’s latest token.
“We're launching things very rapidly. We're engaging in a lot of experimentation,” Andrew Koller, a six-year Kraken veteran who led the development of Ink, told The Block in an interview, explaining the corporate similarities between Kraken and Tether.
Koller noted Tether is very “security-minded” and typically waits several months to see if a chain is stable and meets its criteria to launch. Due to Kraken’s brand reputation and the OP Stack’s “tried and true” tech, the companies reached an agreement to accelerate deployment.
“Paulo and I got really creative with how we could bring Tether over to Ink,” Koller said, confirming there was no money exchanged in either direction.
“We have an awesome reputation for security. We embed security individuals everywhere,” Koller said. “So if we're testing the sequencer or stress testing, they're doing it with us.”
Apart from bringing liquidity to applications like Velodrome, Koller noted USDT0 should help improve the UX of using Ink and other L2s.
“If you have USDT on Ink and for some reason you want to use it on a different chain, it shouldn't feel like you have to do all these hops to get there,” he said.
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