How Much Money Did Tether Make?
Produced | Odaily (ID: o-daily)
Produced | Odaily (ID: o-daily)
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Additional issuance process
The additional issuance of Tether is divided into two links: Authorized and Issue.
Generally speaking, Tether will first issue a certain amount of USDT on the chain, which will also be monitored and reported by various media; then USDT will be transferred to the foundation account, and it will be transparently announced on its official website "Authorized but not issued" (already minted but not dispatched). According to the official statement, the USDT has not flowed into the market at this time, and only the USDT that has actually received the remittance will flow into the market.
Users who have passed the Tether KYC verification can submit an application to transfer legal currency to Tether. The threshold for personal business is 100,000 US dollars. For institutional users, if the volume is large, they need to contact Tether in advance to allow them to issue additional USDT.
"Generally (Tether) will send us (USDT) immediately after receiving the money." RenrenBit founder Zhao Dong told Odaily that after the "Authorized but not issued" is used up, another batch will be issued.
Zhao Dong added that Tether currently does not provide services for the United States, Canada and terrorist countries.
When users want to redeem USD, they only need to send USDT to the designated address. These USDT will be remitted to the Tether Foundation account and become part of "Authorized but not issued".
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The direction of the newly issued USDT
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(Regional distribution of USDT on-chain transfers to exchanges %-DIAR)
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(USDT on-chain transfer volume & exchange reported transaction volume)
In addition, since 2019, the trading volume of USDT has shown an upward trend consistent with the trading volume reported by exchanges, that is, the global cryptocurrency trading volume is indeed rising rapidly in 2019.
The research report of Professor John Griffin, a well-known fraud expert on Wall Street, also pointed out that among the exchanges where Tether eventually flows, OKEx, Huobi, Binance, Bitfinex, Poloniex, Bittrex and other exchanges are the most important.
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(Tether flow diagram in the report)
The pictures in the report show that the first stop of Tether flow is often Bitfinex. This is related to the scope of USDT's early use. At the beginning, USDT was only traded on Bitfinex, and more and more exchanges were supported later.
Zhao Dong also explained that USDT was mainly used to support USD trading services on Bitfinex in the early days; now that USDT’s scope of application has expanded, Tether’s largest flow has changed.
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Tether's positive and negative premiums
For a long time, many investors like to regard the positive and negative premiums of USDT as the wind vane of transactions.
A positive USDT premium means its price exceeds $1, and a negative premium means its price is below $1.
And its root cause is actually the buying and selling behavior. If the market buys a large amount of USDT for a period of time, it will lead to a positive premium on the price, and a large amount of selling will result in a negative premium.
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Orange shaded area: NYAG sued Tether - USDT issuance is suspended; blue shaded area: USDT is in the rapid issuance stage again
However, a positive USDT premium does not always mean that the cryptocurrency will rise. As can be seen from the above figure, after July this year, although USDT still has a positive premium, the price of BTC has gradually fallen. This is mainly because more investors exchange assets such as BTC for USDT for hedging, thereby pushing up the price of USDT.
According to CoinMarketCap data, USDT is still at a negative premium for very little time.
Some investors told Odaily that every time USDT has a negative premium, it can be arbitraged.
In October 2018, Tether encountered a crisis of confidence. At that time, USDT once plummeted by 10%, as low as $0.869. The investor once bought millions of dollars of USDT, and finally the price of USDT recovered to around $1, making a profit of hundreds of thousands of dollars.
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Tether's total profit is 80 million US dollars
In May, Tether, along with Bitfinex parent company, reported total revenue of more than $410 million in 2018. How much of this belongs to Tether?
Zhao Dong explained that the $410 million was all Bitfinex’s profits, not including Tether.
How much Tether earns seems to be a mystery?
According to the official statement, there are two ways for Tether to make profits:
1:1 interest on US dollar deposits in the bank;
A 5% handling fee is charged when the user withdraws cash.
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Tether embraces Ethereum
For several months, Tether has been shifting the focus of USDT issuance from OMNI (Bitcoin network) to ERC20 (Ethereum network). In September, Tether released an official transfer announcement, which means that ERC20-USDT officially replaced OMNI-USDT.
Among them, on September 12, Tether migrated 300 million USDT from Omni to the ERC20 protocol at one time.
Coinmetrics data shows that Omni still has the upper hand at present. Among the 4.1 billion USDT supply, the supply of Omni network is 2.15 billion, while the supply of Ethereum network is 1.96 billion. The number of Tether issued on other blockchains is very small. few.
