A by-the-minute look at Tether’s $1 billion swap from Bitfinex to Binance

Altcoin

On August 20, a Tether swap worth $1 billion happened — it involved Binance, Bitfinex, and a major fire dumpster on TRON (TRX) blockchain. 

Tether flows. Source: Flipside Crypto.

From time to time, the news of Tether burning some of its supply on one blockchain and then minting it anew on another appears in the headlines. Although it sounds easy enough, in reality, it involves quite a bit of planning and more importantly — trust.

Tether $1 billion swap transactions. Source: Cointelegraph.

During the six-transaction swap that spanned two blockchains and took 1 hour and 1 minute to complete, the Tether/Bitfinex side was never at risk as Binance was the initiating party. On the two occasions — after the first transaction and after the fourth one, Binance was down $400 and $600 million respectively. These companies must either have a trusted relationship or perhaps, there were additional mechanisms involved that we are not aware of.

Another necessary condition for the swap was the fact that Binance had a surplus of $1 billion TRON-based USDT and was willing to trade it for the equivalent amount of Ethereum-based USDT. It is unclear whether these funds belonged to the exchange or constituted user deposits.

Cointelegraph has reached out to Binance, Bitfinex and Tether, but has not received a response in time of publication.

Products You May Like

Articles You May Like

Despite endless media appearances, SBF unlikely to testify on 13th
North Korean Lazarus Group Linked to New Cryptocurrency Hacking Scheme
Dems and Reps join forces to pressure SBF to testify before Congress
Bitcoin miner outflow ratio hits 6-month high in new threat to BTC price
How stable are stablecoins in the FTX crypto market contagion?

Leave a Reply

Your email address will not be published. Required fields are marked *