Tether's stablecoin empire expands: Plasma and Stable work together

Tether, as a giant in the stablecoin industry, can earn a profit of 13 billion USD annually just from government bond interest, making it one of the most profitable fintech companies in the world. However, when reviewing its business model, Tether found that while it has gained substantial profits from the issuance and management of USDT, it has not truly participated in the "on-chain economic sharing."

In the daily Gas fees collected by Ethereum, USDT contributed nearly $100,000, accounting for over 6% of the total Ethereum transaction fee consumption. Meanwhile, on the TRON network, the transfer volume of USDT and the Gas consumption accounted for over 98% of the entire public chain, indicating that the trading prosperity of TRON almost entirely relies on USDT.

The TRON network currently has an on-chain revenue of over $2.1 million per day, with an annualized revenue of up to $770 million. The vast majority of this comes from the high-frequency transaction fees of USDT. The total number of on-chain transactions on the TRON network reaches 2.46 million within 24 hours, with an average transaction fee of about $0.85.

For Tether, this is a typical "value capture imbalance". The issuance and branding of USDT have brought huge user traffic and stable demand, but all on-chain transaction fees and ecological dividends have long been "taxed" by the infrastructure, rather than being led by Tether itself. This not only weakens Tether's strategic voice in future on-chain payment and settlement networks but also causes it to lose initiative when facing new threats.

In order to change this situation, Tether has fully invested in building its own stablecoin chain ecosystem. Through a dedicated chain model, Tether can not only "reclaim" the huge transaction fees and ecological dividends that would originally flow to other public chains back into its own system, but also establish its own on-chain closed loop in areas such as B2B payments, compliant settlements, and industrial collaboration.

Tether's first step is to support a new chain called Plasma by the end of 2024. Plasma uses the Bitcoin mainnet as the ultimate settlement layer, inheriting the security of UTXO, while being directly compatible with EVM at the execution layer. Most importantly, all on-chain transactions can be directly paid for with USDT for gas, and the transfer of USDT is completely free.

Plasma has also added two features: "native privacy" and "Bitcoin liquidity." Users can choose to obscure transaction addresses and amounts, or selectively disclose information as needed. At the same time, Plasma promises to seamlessly bring native BTC on-chain through a permissionless bridge, and with Tether's deep dollar pool, low-slippage exchanges and BTC collateralized lending can be completed in the same environment.

Plasma adopts a tiered fee structure. Regular USDT transfers are free, but to prevent abuse, a basic throughput limit and collateral mechanism have been set. Complex operations such as multiple contract calls and batch liquidations require payment of fees. Network revenue mainly comes from these advanced services, as well as small fees for asset cross-chain and custody services.

The main sources of income for Plasma include: enterprise-level "private line" services, gas fees for contracts and bulk settlements, bridging and custody fees, as well as inflation revenue from the governance token XPL. Conservatively estimated, Plasma can bring about $1 billion in revenue to Tether each year.

In addition to Plasma, Tether has also launched an L1 chain called Stable, primarily targeting global financial institutions, corporate settlements, and large-scale clearing scenarios. Stable provides a "dedicated express lane" for these large, compliant, low-latency USD flows, enabling second-level fund settlements.

Through the division of labor between the Plasma and Stable chains, Tether is building a complete on-chain ecosystem. Plasma addresses the on-chain user experience by aggregating small transactions into larger volumes; Stable addresses institutional compliance needs by transforming large transactions into sustainable high profits. This strategy aims to free USDT from being constrained by any single public chain or ecosystem, achieving true "chain sovereignty."

In addition, Tether plans to launch a new stablecoin specifically for domestic payment scenarios in the United States, potentially in collaboration with major American banks. This will further expand Tether's influence in the global stablecoin market.