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Bitfinex acts as a ‘gateway’ between USDT-ETH and USDT-Omni, clarifies Bitfinex’s Paolo Ardoino




Bitfinex acts as a 'gateway' between USDT-ETH and USDT -Omni explains Bitfinex CTO
Source: Unsplash

Bitfinex and Tether have always been at the center of speculation and rumor. Whether it was during Bitcoin’s rise back in 2017, or present-day, the two have been closely scrutinized by users. Recently, Tether’s CTO, Paolo Ardoino, tweeted a thread about Tether being sent back-and-forth between Bitfinex and Tether on Omni and Ethereum blockchain.

Ardoino’s tweet was based on a Whale Alert concerning the transfer of $20 million USDT to Bitfinex from Tether Treasury. Ardoino tweeted,

“Explanation: Tether is issued on multiple chains (Omni, ETH, ..)
When @bitfinex receives too many deposits for Tether-Omni and then users want to withdraw Tether-ETH, @bitfinex sends back to @Tether_to the Omni ones and gets back the same amount in ETH.”

This might be due to multiple reasons. However, the one reason that stands out is the fact that Tethers issued on Omni blockchains are slower when it comes to settling, when compared to Ethereum blockchain. Further, it also depends on the demand for Tether by users on particular blockchains, which is also influenced by the above reason.

Ardoino mentioned that it was based on “market demand” and that Bitfinex acts as a mediator/gateway when this happens. He added,

“Imagine that there is an exchange that has support only for Tether-ETH and has a lower BTC price than others. Lot of customers will need Tether-ETH instead of Tether-Omni. @bitfinex acts as a gateway between the two (several) transport layers.”

Although skeptics believe that there isn’t as much demand for buying Bitcoin as Tether or Bitfinex claims to be, Paolo Ardoino explained that this was normal for assets that were issued on multiple chains like Tether, which is issued on Omni chain, Ethereum, and Tron.

A Tether skeptic, @CasPiancey, responded to the same and tweeted,

“I’m very interested in this. The only transfers of OMNI Tethers to ETH Tethers are from Bitfinex directly. This would imply that traders/customers aren’t necessarily demanding the ETH Tethers, but rather Bitfinex/Tether prefer issuing ETH Tethers over OMNI Tethers.”

Over the last three months, Tether has printed approximately $3 billion USDT, which either shows the actual demand there is, or adds more credibility to the skeptics’ theory.

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