Tether is the world’s most popular stablecoin, a digital currency, whose value is constantly pegged to the value of the American dollar. This has numerous worthy applications, mainly by combining the benefits of the unobstructed money flow available on blockchains with the reduced volatility of fiat currencies.
It’s still a cryptocurrency, meaning that it’s supposed to operate on a blockchain. In order to do that, Tether is supposed to adhere to one or the other standard. Many big cryptocurrencies (BTC, ETH, TRON) have their own unique blockchains, but not Tether. Tether doesn’t have a home network — it operates on a variety of different chains.
Binance Smart Chain (BSC) is one of these networks. Tether is compatible with it through a recently adopted standard called BEP20.
A blockchain standard is a list of guidelines and rules, which regulate how a token works. It’s necessary to make it compatible with a specific blockchain. For instance, the BTC token standard is called BRC20. All coins used on this blockchain, including Bitcoin itself, adhere to the principles written out in this standard.
BEP20 is a separate standard for the Binance Smart Chain network — a recently launched major blockchain focused on BNB. The latter is a lucrative Binance-released token that is currently top-4th by market capitalization in the world. To operate on BSC, tokens must share the BEP20 standard, essentially.
Tether does that. Well, it can’t share several standards simultaneously because many BRC20 rules are incompatible with BEP20 rules. What Tether owners instead did was create a separate variety of Tether with the BSC standard to make it compatible with the growing, promising blockchain.
Different standards of Tether
As mentioned, Tether doesn’t have a home blockchain. This currency was created in 2014 to operate on the Bitcoin blockchain. After that, several more varieties of USDT were created for the ETH network, TRON network, and, now, BSC network. It’s one of the secrets of the USDT’s success — it’s widely available everywhere.
These varieties of USDT are technically different currencies. You can’t store USDT BRC20 and USDT BEP20 as one big pile. In a wallet, they’d go into two different heaps. Fortunately, you can easily convert one into the other, as they are functionally identical besides the underlying standards.
Creating the BSC variant of USDT allows it to enjoy the benefits of this network without really compromising anything. You can always just convert one standard into the other, and the number of USDT in the world won’t change. There are plenty of BSC enthusiasts in the world, so you don’t have to force anyone to do it or mint new tokens just for BSC.
But why even do that? Why is BSC so good that Tether decided to create a whole new variety of their token?
Benefits of BEP20
The BEP20 coins are fully compatible with the BSC ecosystem and infrastructure, meaning they can always be used in wallets, projects, applications, and systems built on the Binance blockchain. These have a lot to offer because BSC was created as an even better version of the indispensable ETH network.
The main benefits are:
- Lower transaction costs and processing time. It doesn’t just improve the comfort, it means you can interact with the many dApps, DeFi solutions, and other projects on BSC for less.
- Smart contracts. Smart contracts are a hugely beneficial tool. Not only is BSC built on these contracts, making the creation of decentralized apps easy and simple. It’s also compatible with Ethereum, meaning you can port your contracts from there to here.
- Cross-chain compatibility. BSC is tightly compatible with other networks, and it was meant this way. For some, it means easier interchain connection. For others, it means an almost seamless connection.
- DeFi and dApps. Decentralized finance and apps were this network’s specialty from day one. By all accounts, developers have a much easier time developing these on BSC than on other platforms.
There’s a lot to gain by taking part in the Binance Smart Chain. Now, it’s possible to do this with USDT. It doesn’t just mean more inclusion for Tether holders. It means that you can basically invest fiat money into the decentralized projects created on this network, and that offers so much potential.
The possibilities are limitless because there is now a huge number of solutions created on BSC by thousands of active developers that frequent this blockchain. They also support Bitcoin, which has never been a problem. However, being able to just use digital dollars on crypto apps is a next-level opportunity.
So, what can you do with the Tether BEP20?
For developers: Developers can utilize the huge potential of BSC without the increased chance of failure attributed to classic cryptocurrencies. Even if they are on the rise now, the creation process can stop simply because they took a big dive following another huge scandal. USDT is simply a lot more stable.
For consumers: There’s a clear divide between the USDT users and those preferring regular crypto (BTC, ETH). There are millions of 100% stablecoin portfolios out there because they let you use the many crypto solutions without entrusting your well-being to chance and volatility. Now, USDT is also available in this way for the countless BSC dApps, which you might be interested in.
For investors: The list of new tokens and cryptocurrencies created on BSC continues to grow. Stuff like Zcash, Cosmos, and BinaryX (and many others) might be promising. Fortunately, you can now buy them for regular old USDTs specifically because of the new standard.
In short, it’s a new wave of inclusivity for countless users who mistrust regular cryptocurrencies. BSC continues to grow, so allowing Tether holders to participate isn’t a bad idea. After all, that’s the main principle of this blockchain — grow, develop, and expand. Several other crypto have already become compatible with BSC, as well.