The breakdown of USDT’s tech stack is actually relatively straight forward but very effective. It all revolves around a three-layer stack.
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The first layer is the blockchain layer. For example as we can see on the image below from its whitepaper Bitcoin was the first blockchain Tether was used on. Now Tether can be used on many different blockchains such as Ethereum, Tron, Solana, Tezos and Polygon to list some of the main ones but the three stack layer is always the same no matter which blockchain it starts with. The Tether transactional ledger is embedded as metadata onto these blockchains via their consensus systems.
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On the second layer, Bitcoin for example as the image shows would have the the Omni Layer protocol. For Ethereum you could have ERC-20 and Optimism protocols to choose from for example.
The layer 2 allows users to buy, sell and store Tether and other assets/tokens in the following way:
- Via a p2p cryptographically secure environment.
- In wallets which can be opensource, browserbased or encrypted webwallets.
- On exchanges and Dapps.
- Tether Limited is the third layer and it is responsible for:
- Accepting deposits in fiat currency and releasing the matching Tether.
- Making withdrawals in fiat and cancelling the relevant Tether.
- Ownership of the fiat reserves that support all active Tether.
- Making audit findings and Proof of Reserves results public.
- Starting and maintaining connections with already-existing wallets, exchanges, and businesses that accept the layer one cryptocurrencies and blockchain.
- Using Tether.to, is an online wallet that enables users to transfer, receive, store and convert Tether. Show Less
