Layer-1 blockchain Tron is contemplating a Bitcoin layer-2 answer that may help a “wrapped” model of Tether (USDT), doubtlessly permitting billions of {dollars} of liquidity to circulate into the Bitcoin ecosystem.
In February, Tron’s founder, Justin Solar, announced a roadmap for Tron’s Bitcoin layer 2 answer in an X submit, which might permit stablecoins and tokens to maneuver between between Tron and Bitcoin.
“This integration won’t solely hyperlink TRON straight with Bitcoin but additionally facilitate entry to over $55 billion in worth to the Bitcoin community, thereby injecting monetary vitality into Bitcoin,” mentioned Solar on the time.
Talking to Cointelegraph, a Tron spokesperson mentioned the plans would “seemingly” contain making a wrapped model of USDT. The Tron community is at present residence to greater than half of USDT’s $104 billion issued throughout a number of blockchains.
“As the house of main stablecoins like USDT, we deliver vital liquidity and stability to the desk,” Tron advised Cointelegraph on Feb. 22.
The mixing would seemingly appeal to new customers to the Bitcoin ecosystem and increase the community’s use instances, notably in decentralized finance, they added.
Solar mentioned a Bitcoin layer 2 answer would permit TRON-based tokens to work together and interoperate with Bitcoin “seamlessly.”
“[It will aim to] preserve the velocity and low charges of POS programs whereas guaranteeing the protection of POW & UTXO together with BTC L2!”
The Tron spokesperson mentioned the plan is just in its idea part however will “seemingly” go forward.
In the interim, the agency will leverage current cross-chain protocols to bridge USDT and different tokens between Bitcoin and Tron. A part of Tron’s plan additionally includes collaborating with a number of Bitcoin layer 2 protocols.
A rival stablecoin to Tether, USD Coin (USDC), might be a special story as Circle, its issuer, ceased minting USDC on Tron in February.
The Tron spokesperson mentioned a latest surge in group curiosity to increase Bitcoin’s performance and scalability was one of many predominant the explanation why it thought-about constructing a layer 2 answer.
Growing decentralized purposes on Bitcoin may doubtlessly enhance Bitcoin’s (BTC) value dynamics too, as charges can be denominated in Bitcoin, they added.
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In the meantime, Tron’s decentralized autonomous group, TRON DAO, can also be trying to construct a user-friendly pockets and toolset to help Bitcoin-based Ordinals and BRC-20 tokens.
Cryptocurrency funding agency CoinShares predicted in January {that a} Bitcoin-based stablecoin may emerge in 2024 that would rival the velocity and value of different stablecoins within the business.
Liquid-based Tether (L-USDT) is without doubt one of the few United States dollar-denominated stablecoins at present circulating on a Bitcoin layer-2 community.
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