Tron Explores Bitcoin Layer-2 Solution to Integrate a 'Wrapped' Tether
Summary:
Tron, a primary blockchain network, is exploring a layer-2 solution for Bitcoin that could allow a "wrapped" version of Tether (USDT) into the Bitcoin ecosystem. This move would bring billions in liquidity, potentially lure new users, and open up more use cases, especially in decentralized finance. As strides are made and USDT's position strengthens, the enhancement of Bitcoin's features becomes increasingly likely. Tron's agenda also includes building a user-friendly wallet and toolset to support Bitcoin-based tokens.
Tron, a primary blockchain network, is examining a layer-2 solution for Bitcoin that could accommodate a "wrapped" form of Tether (USDT), potentially enabling billions in liquidity to enter the Bitcoin environment. Back in February, Tron's creator, Justin Sun, unveiled a development plan for Tron's layer-2 solution for Bitcoin in a specific post. This initiative would enable stablecoins and tokens to shift between the Tron and Bitcoin networks. Sun stated that this integration would not only directly link Tron with Bitcoin but also provide access to over $55 billion worth of value to the Bitcoin network, consequently injecting financial life into Bitcoin.
A Tron representative mentioned to Cointelegraph that it's highly likely that there would be the creation of a wrapped form of USDT. Currently, the Tron network houses over half of USDT’s $104 billion issued across various blockchains. Tron stated that as USDT's abode, it brings about significant liquidity and stability. The integration would possibly attract new users to the Bitcoin network and increase its applications scope, notably in decentralized finance. Sun proposed that a layer-2 solution for Bitcoin would facilitate seamless interaction and interoperability between TRON-based tokens and Bitcoin, maintaining the velocity and cost-effectiveness of POS systems while ensuring the safety of POW & UTXO in unison with BTC L2!
At the moment, it's said that this initiative is purely in its theoretical phase but is highly likely to proceed. For now, the company will utilize existing cross-chain protocols to bridge USDT and other tokens between Bitcoin and Tron. Part of Tron’s strategy also entails working with numerous Bitcoin layer-2 protocols. However, a competitive stablecoin to Tether, USD Coin (USDC), could be a different case as Circle, the firm that issues it, halted the minting of USDC on Tron in February.
A Tron representative cited an upsurge in community interest to expand Bitcoin’s features and scalability as a primary factor for considering a layer-2 solution. The development of decentralized applications on Bitcoin could possibly enhance Bitcoin’s (BTC) price dynamics because fees would be quoted in Bitcoin.
In the meantime, Tron’s decentralized autonomous organization, TRON DAO, is also exploring the creation of a user-friendly wallet and toolset to facilitate Bitcoin-based Ordinals and BRC-20 tokens. Cryptocurrency investment company CoinShares predicted in January that a Bitcoin-based stablecoin might materialize in 2024 that could compete with the speed and cost of other stablecoins in the sector. Tether for Liquid (L-USDT) is one of the rare stablecoins denominated in United States dollars currently in circulation on a Bitcoin layer-2 network.
Published At
3/25/2024 8:00:22 AM
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