Tether (USDT) on the Algorand network
What gives USDT users on the Algorand network?
Algorand is a pioneer in the crypto market. This network was launched in June 2019 and is aimed at corporate clients in particular. Algorand's blockchain is designed based on Proof-of-Stake (PoS) consensus and provides a network throughput of one thousand transactions per second. The transactions themselves are completed within four seconds, making Algorand one of the highest-performing blockchains.
Like other blockchains based on smart contracts, Algorand allows the issuance of unlimited tokens. However, as of September 2024, only 16 tokens have been issued on the Algorand network. Moreover, most are little-known and have a small capitalization: only 4 exceed $1 million.
Nevertheless, after the appearance of USDT in the Algorand network, users can quickly convert their tokens into more stable assets, thus protecting themselves from the high volatility of cryptocurrencies. Stablecoin USDT on the Algorand network allows assets to be stored as a digital equivalent of the US dollar on the blockchain without resorting to intermediaries such as banks, and the presence of the DeFi ecosystem allows for quick token exchanges right in the wallet.
In addition, USDT transfers on the Algorand network are completed in a few seconds, and the transaction cost is less than a cent — this is a distinct advantage of using this blockchain, especially against the background of transactions on the Ethereum network, which were quite expensive until the release of the Dencun update in March 2024.
Termination of USDT support in Algorand
In June 2024, Tether announced that it would stop issuing USDT on the Algorand blockchain, although this decision could change. The likely reason is the low demand for the Algorand network and decreasing user activity amid growing competition among blockchains in the crypto market.
In other words, there are already dozens of blockchain networks in the crypto industry that are no less productive, provide low transaction costs, and have a more developed ecosystem, which makes them more attractive to both users and issuers of stablecoins.
The Tether issuer will continue to redeem its stablecoin until June 2025, but new tokens can no longer be mined in the Algorand blockchain. And this is not even due to the low liquidity of USDT in Algorand: the capitalization of the stablecoin in this network at the time of the announcement of termination of support was about the same as in Polkadot — $17.2 million vs. $17.9 million, respectively. However, as of September 2024, the number of USDT traded on the Algorand blockchain is only 2 million — less than 0.01% of the total capitalization of the stablecoin.
Where to store USDT on the Algorand network?
The Algorand network and its tokens support a small number of wallets, but among them, there are pretty popular ones:
- Ledger (hardware wallet);
- Trust Wallet;
- Exodus;
- Pera Wallet;
- AWallet;
- Aikon ORE;
- Defly Wallet;
- Lute.
Where can you buy USDT on the Algorand network?
The Algorand network is not very popular among USDT owners and users. Despite the low fees and fast transactions, they prefer other blockchains such as Ethereum, Tron, Polygon, and Solana. Cryptocurrency owners often use these networks, as they are most active in attracting new users.
Due to the low demand, few online exchangers support the exchange of USDT in the Algorand network for other assets and currencies. However, it is possible to buy USDT in this network using centralized (CEXes) and decentralized exchanges (DEXes). There are few DEXes in the Algorand ecosystem, and only Tinyman and Pact are relatively liquid.