Tron loses $ 1 billion Tether to Ethereum in chain exchange

TRON can be in trouble because excitement surrounding Ethereum outperforms the competition.

Stablecoin provider Tether announced today a “chain exchange” for $ 1 billion USDT dollar-pegged tokens of the TRON TRC20 token standard on the Ethereum blockchain at the request of an undisclosed cryptocurrency exchange.

Although not officially confirmed by Tether, there are indications on the blockchain points to Binance as the exchange in question, which sent $ 600 million back to the Tether Treasury on the TRON blockchain. The exchange comes as the booming DeFi brand Ethereum and many ERC20 tokens shot higher, pulling volume away from TRON as crypto traders chase moonshots and revenue on the world’s second-largest blockchain network.

Tether’s token exchange will reduce supply of TRON-based TRC20 Tether tokens from $ 4.3 billion to $ 3.3 billion, while Ethereum’s ERC20-based Tether offering expands to $ 8.5 billion. In the announcement, Tether stated that the total offer of USDT, currently more than $ 12 billion, remains unusual from the exchange.

Tether minted billions of additional USDT tokens during the recent crypto run, increasing its offering from $ 10 billion on June 22 to more than $ 12.6 billion today, a more than 25% increase in just two months. Tether has been the single biggest source of congestion on the Ethereum blockchain at that time, well over 14% of all transactions.

The OMG Network (formerly Omise GO) recently launched Tether transactions as an Ethereum Layer 2 scaling solution to move some of that traffic from the main Ethereum blockchain in an effort to reduce transaction costs, but it’s unclear how the new influx of $ 1 billion Tethers will plan influence.

TRON and its founder, Justin Sun, have been at the center of ongoing controversy over the fork of the popular Steemit cryptoblogging platform, recently culminating in a lawsuit against centralized exchange Bitfinex seeking about $ 16 million.

Given the evidence pointing to Binance as the billion dollar chain change initiator, the move may just come as a result of lower than expected TRON-related Tether trading on the world’s largest exchange my volume. (Representatives for Binance and Tether did not respond immediately Encryptis requesting comments.)

But the move could also signal the beginning of an expanded disconnect between Ethereum and its competitors, as rapid DeFi development accelerates adoption.