Tether Suspends Omni Minting Signals Bitcoin Comeback

Author: Osato Avan-Nomayo, DL News Compiler: Shan Ouba, Golden Finance

• Tether has stopped offering the USDT stablecoin on the Omni Bitcoin meta layer. *USDT issuer blames lack of users on Omni layer for its decision.
• Tether said it plans to support a new bitcoin scalability layer called RGB.

Tether announced Thursday that it has stopped issuing the U.S. dollar-pegged USDT stablecoin on the Omni, Kusama and Bitcoin Cash SLP networks. USDT users on these affected platforms have one year to transfer funds to other supported networks, the announcement added. Tether's ceasing to use USDT on Omni makes some sense, as Tether and Omni's relationship goes back to the stablecoin issuer's origins. Omni was the first layer to issue USDT in 2014 and remained the most popular until it was replaced by the Ethereum and Tron network implementations of the stablecoin.

What is Omni? What does it have to do with Bitcoin?

Omni is a meta layer built on top of Bitcoin in 2013, marking the first attempt at scaling a blockchain network. Unlike Ethereum's layer 2 network, which is an independent blockchain, Omni is a platform that aims to bring smart contract functionality to Bitcoin. The metalayer had some initial success as it was the first place to issue a token called Mastercoin, which is considered the first altcoin.

Additionally, Mastercoin provides yet another example of the connection between Tether and Omni, as Tether co-founders Brock Pierce and Craig Sellars are founding members of the Mastercoin Foundation . Silas previously served as the foundation's chief technology officer.

Tether highlighted the lack of users and the popularity of USDT on other chains as reasons for stopping the issuance of stablecoins on Omni. The USDT supply on Omni is about $237 million, which is only about 0.29% of the USDT supply circulating on all supporting chains. The other networks affected have much lower liquidity. On Kusama and Bitcoin Cash SLP, the supply of USDT is $1.4 million and $987,000, respectively.

On Tron, USDT has the highest supply, even surpassing Ethereum. The USDT supply on Tron is $43.5 billion, almost 50% of the stablecoin’s total supply. USDT's popularity on Tron is largely driven by users in developing countries in Latin America, Africa and the Middle East, where the network's low transaction fees make it ideal for transactions.

Tether's association with Bitcoin doesn't end there

Tether said that ceasing to use USDT on Omni does not mean the end of its relationship with Bitcoin. The stablecoin issuer added that if it gets more user activity in the future, it will restore USDT on the Bitcoin meta layer. Tether also pointed to RGB as another frontier for leveraging its stablecoin on top of Bitcoin. RGB is similar to Omni in that it is another attempt to improve Bitcoin's scalability. It is a smart contract system integrated with the Bitcoin Lightning Network.

"RGB is a scalable and confidential smart contract system for Bitcoin and the Lightning Network that enables the creation of products and services on Bitcoin without the need for new tokens like Ethereum," said a representative of Portico Labs, the developer of Portico. The decentralized exchange on Twitter told DL News.

Tether plans to issue USDT on RGB, a move the company says will allow users to "witness USDT on yet another ultra-powerful and scalable layer of Bitcoin." For Portico Labs, the advent of RGB will be the end of other blockchains, a bold claim often espoused by Bitcoin purists. Meanwhile, Tether said market forces will determine which blockchain is most conducive to the transfer of value in the cryptoeconomy.