Tether’s New Gold Stablecoin Gamble Feels Next Level, Even for Them

I guess “redefining stability together” is one way to put it. Another is to say “come along as Tether adds new layers of synthetic assets to its black box of an operation and hope for the best.”

Tether is adding a new layer to its black-box operation by allowing customers to treat its Alloy platform as an open platform that allows the creation of different Tethered Assets with broader backing mechanics. This move comes as Coinbase is using Base to funnel users towards its USDC stablecoin, and banks and fintech firms are also entering the stablecoin market.

In an X thread, crypto academic Adam Cochran posits that Tether is trying to expand into other assets and into DeFi at a time when Coinbase is using Base to funnel users towards its USDC stablecoin, and banks and fintech firms are muscling in on the stablecoin market too.

Tether wants to diversify in case its USDT golden goose is threatened. This makes good business sense for Tether and its ambitious CEO. Tether is also requiring those who want to create a gold-backed stablecoin to post extra collateral—a practice that has worked for a decade in the case of the pioneering decentralized stablecoin DAI.

However, the idea of Tether spinning up a whole series of new crypto assets beyond USDT, and having those assets serve as collateral for other Tether assets, could be troubling.