Tether’s Gold-Backed Alloy Token Barely Minted Since Launch A Month Ago

Tether, a well-known issuer of stablecoins, recently launched a new gold-backed token called Alloy (aUSDT). However, the adoption of this new token has been minimal since its launch a month ago. Let’s break down the key points to understand what might be happening.

Minimal Adoption of aUSDT

Since its launch, only five wallets have opened positions with the aUSDT token, and just 32 wallets are currently holding it. This is quite low compared to other stablecoins that Tether offers, which are backed by the US dollar and have seen much higher adoption rates.

Transaction Volume

In the last 24 hours, only $34 worth of aUSDT has been transacted. This low transaction volume indicates that the token is not being actively used or traded in the market. For a new financial product to succeed, it generally needs to see higher levels of activity and interest.

Backing and Trust Issues

The aUSDT token is intended to be backed by gold stored in Swiss vaults. However, the token’s oversight is managed by El Salvador’s CNAD. This setup requires users to trust Tether’s assurances that the gold backing actually exists and is secure. The lack of trust in these assurances might be a significant factor contributing to the low adoption rate.

Comparison with USD Stablecoins

USD-backed stablecoins from Tether have been much more popular and widely adopted. These stablecoins offer a level of stability and trust that users seem to prefer over the new gold-backed aUSDT. The familiarity and established trust in USD-backed stablecoins make them a more attractive option for most users.