In addition to burning its tokens, Tether also announced an audit with 12 leading companies to ensure the transparency of its USDT reserves.
Today, Tether has announced the burning of as much as $11.1 billion of its USDT stablecoins as a result of the past-period redemptions. According to Tether CTO Paolo Ardoino, the company has burned 6.6 billion tokens on the TRC-20 network as well as 4.5 billion tokens on the ERC-20 network.
FYI: Tether is burning the tokens sitting in the treasury wallets, resulted from past period redemptions. Tokens in the treasury wallet are not to be considered issued and they are burned periodically.
Current burns:
– 6.6B on TRC20
– 4.5B on ERC20 https://t.co/GKycjkn7b5— Paolo Ardoino 🍐 (@paoloardoino) June 20, 2022
This is not the first time Tether is burning USDT, but obviously, it is the largest amount of tokens the platform has ever destroyed. As the USDT price is pegged against a stable asset (which is the US dollar), the coin is not mined and not decentralized. The company behind the coin, or Tether, issues (mints) and destroys (burns) USDT tokens to adjust the supply of coins to user demand. For example, earlier in May, Tether burned a total of 3 billion USDT tokens in an account known as Tether Treasury in two consecutive burns, 2 billion and 1 billion USDT accordingly.
The burn comes as a result of negative information about Tether. As investors are losing confidence in the platform and stable assets in general, Tether has lost significant market share amid a slew of market corrections. For comparison, the market capitalization of USDT in early May was $83 billion, and as of today, it is fluctuating around $67 billion, the lowest since October last year. Notably, Tether has lost more than $16 billion in market cap in just 2 months.
Tether Audit
In addition to burning its tokens, Tether also announced an audit with 12 leading companies to ensure the transparency of its USDT reserves.
— Tether (@Tether_to) June 20, 2022
MHA firm is taking care of attestations of Tether reserves, while Tether itself is working on a comprehensive audit. According to Paolo Ardoino, MHA will gauge the assets on a quarterly basis. Notably, MHA does not belong to one of the big four auditors. They are not conducting the assessment due to lack of legislative standards governing stablecoins and the risk it causes.
Ardoino commented:
“I think its one of the top 12, so not that bad. The big four are a bit more cautious about providing a full audit when the rules are not clear.”
Tether CTO has also noted that everything should be transparent as clarity and transparency ensure stability.
Paolo Ardoino added:
“You cannot have a guy establish new cryptocurrencies in the early hours and call it a stablecoin because it is backed by another currency and kindness.”
The company has promised to provide any information the regulators might require. According to Ardoino, Tether has already shared the data about its reserves over the last two years.
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