Tracking Tether on Different Blockchains

The most popular stablecoin by volume, Tether, is used on a variety of different blockchains. We examine a snapshot of data showing Tether transaction volume across different blockchains. Our findings show substantial differences between blockchains, with activity understandably being concentrated on networks where transaction costs are low.

Tether Background

Tether (USDT) is a type of cryptocurrency known as a stablecoin that was launched in 2014 by Tether Limited. As a stablecoin, Tether is designed to maintain a stable value by being pegged to the value of a fiat currency, specifically the US dollar, with each USDT token theoretically backed by one US dollar held in reserve. This design aims to combine the technological advantages of cryptocurrencies—such as blockchain-based transactions and programmability—with the price stability of traditional currencies.

Initially, Tether operated primarily on the Bitcoin blockchain through the Omni Layer Protocol, but over time, activity has migrated to other blockchains where transaction costs are lower. These chains include Ethereum, Tron, Solana, and Algorand. This multi-chain presence has contributed significantly to its widespread adoption across various cryptocurrency ecosystems. Tether regularly deploys to new chains and then ceases activity if market demand is not present. Tether remaining on a particular chain is suggestive that there is sufficient market demand to warrant its being deployed to the chain in question.

In the cryptocurrency market, Tether serves several important functions. It provides traders with a way to mitigate the volatility inherent in other cryptocurrencies, offers a stable medium of exchange within crypto markets, and functions as a bridge between traditional financial systems and cryptocurrency markets. As a result, USDT has become one of the most traded cryptocurrencies by volume, playing a crucial role in providing liquidity to cryptocurrency exchanges and facilitating trading pairs with other cryptocurrencies.

Different Blockchains

Ethereum

Ethereum is a decentralized, open-source blockchain that supports smart contracts and decentralized applications (dApps). Launched in 2015 by Vitalik Buterin and a group of developers, Ethereum introduced the concept of programmable blockchains, allowing developers to build and deploy self-executing contracts. It operates on a proof-of-stake (PoS) consensus mechanism, following its transition from proof-of-work (PoW) through the Ethereum Merge in 2022. This upgrade significantly reduced Ethereum’s energy consumption and paved the way for future scalability improvements.

Ethereum's transaction speed and costs are influenced by network congestion and gas fees. On average, Ethereum processes 15-30 transactions per second (TPS), but this can vary depending on demand. High activity on the network can lead to congestion, resulting in increased gas fees—measured in gwei, a fraction of Ethereum (ETH). These fees fluctuate dynamically based on network activity and the complexity of transactions. Ethereum Layer 2 scaling solutions, such as Optimistic Rollups and zk-Rollups, aim to increase transaction speeds and reduce costs by processing transactions off-chain before finalizing them on the main Ethereum network.

Solana

Solana is a high-performance blockchain platform designed for scalability, speed, and low-cost transactions. Launched in 2020 by Anatoly Yakovenko, Solana employs a unique Proof-of-History (PoH) consensus mechanism combined with Proof-of-Stake (PoS) to enhance transaction efficiency. This innovative approach enables Solana to process a significantly higher number of transactions per second (TPS) compared to traditional blockchains. Its ecosystem supports decentralized applications (dApps), DeFi platforms, and NFT marketplaces, making it a strong competitor to Ethereum.

Solana is known for its exceptionally fast transaction speeds, capable of handling 50,000–65,000 TPS under optimal conditions. Unlike Ethereum, which often struggles with congestion and high gas fees, Solana offers low transaction costs, typically around $0.00025 per transaction. This affordability makes it an attractive choice for developers and users looking for scalable blockchain solutions. However, the network has experienced occasional outages due to high traffic and technical issues, highlighting challenges in maintaining continuous uptime while achieving high throughput.

Tron

Tron is a blockchain platform designed to provide a high-speed and low-cost environment for decentralized applications (dApps) and digital content sharing. Founded by Justin Sun in 2017, Tron initially launched as an Ethereum-based ERC-20 token before migrating to its own blockchain in 2018. The platform utilizes a Delegated Proof-of-Stake (DPoS) consensus mechanism, where a select group of validators (called Super Representatives) are responsible for verifying transactions and securing the network. This system enhances efficiency and reduces transaction costs, making Tron a popular choice for stablecoin transfers, gaming, and DeFi applications.

Tron is known for its high transaction speeds, processing up to 2,000 transactions per second (TPS)—significantly faster than Ethereum’s base layer. One of its key advantages is its low transaction fees, which are often close to zero. Unlike Ethereum, where gas fees can fluctuate based on network congestion, Tron’s fee structure is optimized for affordability, making it particularly appealing for Tether (USDT) transactions and micropayments. The combination of high throughput and minimal fees has contributed to Tron’s growing adoption, especially for stablecoin transfers and decentralized finance (DeFi) applications.

Binance Smart Chain

Binance Smart Chain (BSC) is a blockchain network developed by Binance to support smart contracts and decentralized applications (dApps). Launched in September 2020, BSC was designed as a parallel chain to Binance Chain, offering compatibility with Ethereum’s Ethereum Virtual Machine (EVM) while maintaining lower fees and faster transactions. It uses a Proof-of-Staked-Authority (PoSA) consensus mechanism, which combines elements of Proof-of-Stake (PoS) and Delegated Proof-of-Authority (DPoA), allowing for faster block times and lower costs compared to Ethereum.

BSC is known for its fast transaction speeds, with a throughput of around 100-160 transactions per second (TPS), significantly higher than Ethereum’s base layer. Transaction fees on BSC are also much lower, typically costing just a few cents per transaction. This affordability has made BSC a preferred choice for DeFi projects, NFT marketplaces, and stablecoin transfers, particularly for Tether (USDT). However, BSC’s reliance on a smaller set of validators has raised concerns about decentralization, as it is more centralized compared to networks like Ethereum and Solana. Despite this, its efficiency and cost-effectiveness have contributed to its widespread adoption in the blockchain ecosystem.

Methodology

We examined a snapshot of data showing transactions over 24-hours. Data was recorded from respective blockchain explorers, including Etherscan, Solscan, BSCScan, Tronscan, and Polygonscan. Our use of a singular data point means findings cannot be generalized. This data is simply taken to show a snapshot of transactions across chains at a given point in time. For more robust findings, a minimum of 6-8 data points should be taken across time from different blockchains. The data also likely shows some incorrect transaction counts and notably does not include bridged or wrapped tokens.

Findings

Descriptive statistics are as follows:

Max Total Supply (Units)

• Mean: 29,165,340,360.74

• Standard Deviation: 38,619,003,042.07

• Minimum: 554,062.99

• 25th Percentile: 814,695,021.80

• Median (50th Percentile): 2,389,933,813.30

• 75th Percentile: 66,729,830,031.17

• Maximum: 75,891,699,896.90

Transaction Count (24h)

• Mean: 943,765

• Standard Deviation: 1,031,449

• Minimum: 148

• 25th Percentile: 212,938

• Median (50th Percentile): 446,632

• 75th Percentile: 1,693,387

• Maximum: 2,365,720

Additional statistical analyses are as follows:

Max Total Supply

• Skewness: 0.43 (slightly right-skewed, meaning a few larger values are pulling the distribution to the right)

• Kurtosis: -1.79 (platykurtic, meaning a flatter distribution with fewer extreme values)

• Range: 75,891,145,833.91 (difference between max and min values)

• Variance: 1.49 × 10²¹ (high spread of values)

• Median Absolute Deviation (MAD): 2,389,379,750.31 (robust measure of variability)

Transaction Count (24h)

• Skewness: 0.49 (moderately right-skewed, indicating a long right tail)

• Kurtosis: -1.47 (platykurtic, meaning fewer extreme values)

• Range: 2,365,572 (difference between max and min transactions)

• Variance: 1.06 × 10¹² (high spread of values)

• Median Absolute Deviation (MAD): 446,484 (indicating variability around the median)

Discussion

The data shows that the max total supply and transaction counts have a slightly right-skewed distribution with a wide range of values. The variance is high, especially for max total supply, suggesting large differences between blockchain networks. There may be data missing from Solana; there is a massive difference between the total supply on Solana and the volume of transactions. This should be re-examined to ensure the total volume of USDT on Solana is being counted. As noted, the limited nature of the data used limits the potential for any meaningful insights but shows on a given day that transactions are largely concentrated to Tron and Solana, which is keeping with their offering the fastest speed and lowest transaction costs.

Conclusion

Stablecoin activity is likely to concentrate on chains offering the fastest speed and lowest transaction costs. While Ethereum may continue to hold the largest amount of stablecoins by value, users make use of lower cost chains to facilitate transactions more quickly and at lower cost. Future research should take additional data points and snapshots over time to allow for more robust findings and time series analysis.