Tether, the world’s largest stablecoin issuer, has selected Kava, a layer-1 blockchain optimised for scalability and speed, as its entry point into the Cosmos ecosystem. With Kava’s backing, Tether says that USDt integration into the Cosmos and EVM ecosystems will be able to grow with greater security and liquidity. This new development is intended to redefine the future of decentralised finance (DeFi) by encouraging the development of a strong and welcoming environment for users everywhere.
How Kava will impact Tether’s operations in Cosmos
Users and developers in the Cosmos ecosystem will benefit from Tether’s choice to fully integrate USDt on Cosmos, with Kava serving as a hub. This move also means that dApps built on the Kava EVM and the Cosmos appchain will be able to use USDt, the most liquid stablecoin in the world.
According to a company release, native USDt issued on Kava will help mitigate the risks associated with participating in the Cosmos ecosystem, including as limited growth, low liquidity, and high volatility. With a widely established and trusted canonical stablecoin, they are confident that this will spark a thriving DeFi economy, benefiting app chains, EVM dApps, and their users.
To facilitate the provision and transfer of stablecoin liquidity between the Cosmos and Ethereum ecosystems, Kava’s natively issued USDt provides a streamlined, efficient approach. Thus, this integration may spark a major expansion of the DeFi economy on Cosmos, offering a compelling solution to the liquidity problem that has been challenging since the collapse of Terra’s UST in Q1 2022.
In contrast, many external bridge solutions, which are characteristic of many versions of a wrapped asset, limit liquidity, discourage participation, and compromise user experience. Tether’s dominant position in the market and stellar reputation mean that integrating this stablecoin will provide users and creators with an extra layer of safety and trust.