In terms of market capitalization, USDT is currently ranked third just behind Ethereum and Bitcoin which I think tells a lot about the current size of the stablecoin market and how it has evolved/grown so much over the last few years despite various regulatory FUD. Tether is also the largest capped stablecoin currently available on the market around 3x bigger than its next competitor USDC. Tether’s market cap is currently at the time of writing this review around $83 billion. There is no maximum restriction on the supply of USDT tokens as there is no limit to the number of tokens in custody that are tied to USD.
Over many years now, Tether’s core tokenomics have come under question as pointed out in my micro review. Tether states that it keeps enough dollars on hand to back each USDT token with one. However it was only after settling with New York Attorney General’s office that they disclosed for the first time a breakdown of their total reserves.
As of today only 84.7% of Tether’s reserves are held in cash or cash equivalents. The rest of the reserves are composed of various “cash equivalents,” including corporate bonds, precious metals, loans, ‘other investments’ and Bitcoin. Based on some of these cash equivalents and their constant price fluctuations it is easy to see why Tether may not always be exactly backed 1:1 like its supposed to be and its why I will give their tokenomics only 3*. Show Less
