Wormhole Supports Cross-Chain Transfer Solution for Native USDT

Wormhole has recently announced support for cross-chain transfer mechanisms for the native version of USDT.

Wormhole Supports Cross-Chain Transfer Solution for Native USDT

The native version of USDT will now be supported for transfer between Ethereum and other popular EVM networks. This solution, supported by Wormhole, is in collaboration with two DEX platforms, PancakeSwap and Uniswap V3.

Previously, Wormhole users had to use the Wrapped Token version (a packaged representative version), which caused considerable inconvenience and confusion during asset transfers. The latest solution introduces an intermediary version, xUSDT (Wormhole USDT), which will act as a bridge. Additionally, liquidity pools for xUSDT/USDT at each bridge endpoint will be supported under a concentrated liquidity model.

This approach minimizes exchange rate volatility due to dispersed liquidity, while allowing users to utilize the native version of USDT on the destination chain.

The fee proposed by Wormhole for transferring USDT between chains will range from 0.02% to 0.04%. This feature has also been added to the Wormhole Connect toolkit to facilitate easier integration for developers.

Previously, Wormhole Connect integrated the CCTP protocol from Circle. CCTP's approach involves mint-burn, differing slightly from the intermediary mechanism with liquidity pools supported by Tether.

The collaboration between Tether and Wormhole helps the stablecoin issuer reduce the resources needed to build a native token transfer protocol like CCTP. However, this approach comes with some trade-offs, such as less control over integrating new features.

As of the time of writing, Tether remains the largest stablecoin by market capitalization, with a value hovering around $112 billion.