Tether, the company that issues stablecoins, has officially announced a $1 billion chain transfer to move USDT from the Solana network to the Ethereum blockchain. The entire quantity of the tokens won’t change throughout this operation, according to Tether.
The announcement comes at a time when Solana, which was just a few weeks ago among the top 5 cryptocurrencies by market size, is experiencing issues as a result of the collapse of cryptocurrency exchange FTX.
Chain swapping is the process of moving cryptocurrency from one blockchain to another. Tether has done this several times in the past whenever demand for using its stablecoin switched from one blockchain to another. For instance, Tether transferred twice $1 billion in USDT from Tron to Ethereum in the middle of 2020.
Because the now bankrupt company, Alameda Research, was SOL’s single-largest investor and its former CEO Sam Bankman-Fried personally promoted it as an Ethereum substitute, the collapse of FTX and Alameda Research has been particularly brutal on the blockchain and its native SOL token.
The co-founder of Solana fiercely denied having significant exposure to FTX or that the company’s collapse would have any disastrous consequences. However, as was noted, FTX used client funds worth billions of dollars to fund hazardous bets at Alameda Research, its linked trading business, which paved the road for its abrupt collapse.
FTX was unable to close the deficit with its $1 billion in cash assets and was finally forced to declare bankruptcy.
Solana is currently ranked 16th by market cap after losing over 25.4% during the past week.