Tron, the Layer-1 blockchain, is exploring the possibility of implementing a Bitcoin layer-2 solution that would support a wrapped version of Tether (USDT). This move has the potential to bring billions of dollars of liquidity into the Bitcoin ecosystem. Tron’s founder, Justin Sun, announced the roadmap for Tron’s Bitcoin layer-2 solution in a post back in February. The plan aims to enable the seamless movement of stablecoins and tokens between Tron and Bitcoin. Tron is currently home to over half of the $104 billion worth of USDT issued across multiple blockchains, making it a significant player in terms of liquidity and stability. By integrating with Bitcoin, Tron hopes to attract new users and expand the use cases of the network, particularly in decentralized finance. The Tron spokesperson mentioned that the plan is still in the concept phase but is likely to proceed. In the meantime, Tron will utilize existing cross-chain protocols to bridge USDT and other tokens between Bitcoin and Tron, and will also collaborate with various Bitcoin layer-2 protocols. The decision to pursue a Bitcoin layer-2 solution was driven by the growing interest in expanding Bitcoin’s functionality and scalability within the community. Tron also aims to develop user-friendly tools and wallets to support Bitcoin-based Ordinals and BRC-20 tokens through its decentralized autonomous organization, Tron DAO. CoinShares, a cryptocurrency investment firm, predicts that a Bitcoin-based stablecoin may emerge in 2024, which could rival the speed and cost of other stablecoins in the industry. Currently, Liquid-based Tether (L-USDT) is one of the few USD-denominated stablecoins circulating on a Bitcoin layer-2 network.
Bitcoin Could See Influx of 'Wrapped' USDT Through Tron's Layer-2 Strategy