Observations and personal opinions from Nothing Research Partner @0x_Todd. The following content does not constitute any investment advice.
Uni 4.15 is set to restart liquidity mining, involving 12 pools, many of which are related to $USDT0. So taking this opportunity, I’ll talk about USDT0.
First, what is USDT0?
Simply put, it is the cross-chain version of USDT; the parent asset USDT exists on ETH, and by crossing chains via Layer0, it becomes USDT0 on other chains.
USDT0 supports mutual cross-chain transfers, such as ETH-Arb-Unichain-Bear Chain-megaETH, etc.
Who is behind USDT0?
This is the most tricky part, and it took me a while to figure it out.
The USDT0 project is backed by a collaboration of 1+3 parties:
1. Led by Everdawn Labs;
2.1 The underlying technology used is Layer0;
2.2 Backed by Tether;
2.3 Backed by the INK public chain (this is the chain issued by Kraken).
But who exactly is Everdawn Labs? There is no clue online.
I reasonably suspect that it is just a front for Tether.
This fits their tone quite well:
If nothing happens—then everyone can normally enjoy the multi-chain convenience of USDT;
If something goes wrong—then it’s Everdawn Labs’ fault, and has nothing to do with Tether.
One reason for this speculation is that after USDT0 came out this year, Tether immediately expressed support, and then Bitfinex also published an article for interpretation. If there wasn't a strong relationship, they (BF and Tether) wouldn't provide such support.
How to evaluate?
I think if Tether personally does this bridge, it will definitely be a great achievement, as it can allow USDT to cross chains without loss, saving the need for various third-party cross-chain bridges.
However, my level of trust in Layer0 is limited.
There are countless examples of top cross-chain bridges failing in the past, from multichain to thorchain. The technology of cross-chain has no threshold; it’s just multi-signature.
In the past, USDT always used the official bridge and did not use L0 as a third-party bridge.
Official bridges are generally safer, but the downside is that liquidity is dispersed.
For example, if you want to transfer large funds from Arb to OP without loss, you must Arb back to ETH and then go to OP, and using a third-party bridge quickly will cost money.
PS: Not to mention that there are public chains like Sei, where official bridge entries and exits are charged.
If using the USDT0 solution, Arb can go directly to OP, without loss and instant.
PS: Of course, there is a historical issue with OP, which is that the USDT on OP is an old cross-chain version of ETH, and it has not yet unified with the youth version of USDT0, so while Arb to OP is nominally feasible, it has not been used in practice; this is just an example.
For new public chains, because they support USDT0 from the start and have no historical issues, their usability is much higher.
But!
Tether itself is reluctant to personally build this bridge, insisting on sending out Everdawn Labs to cover up, which is a bit...
In the past, when I mined $UNI on ETH, I only had to bear the small third-party risks of Tether and Uniswap. Now I have to bear four more, namely:
Everdawn don't mess up
L0 don't mess up
Unichain don't mess up
USDT0 supports N other public chains, and each one shouldn't mess up
(If other public chains are hacked, USDT0 can be infinitely minted, then the USDT0 on other chains will also be contaminated.)
Sounds a bit overwhelming.