USDT0: The Dollar That Bridges Blockchains

The world's largest stablecoin, USDT, has evolved to meet the growing demand for digital dollars across different blockchains. In January 2025, Tether launched USDT0, a version of its dollar that can travel between chains without being wrapped into incompatible IOUs.

This new system uses LayerZero's Omnichain Fungible Token standard (OFT) to create a single, standardized representation of the dollar that can be minted and burned across multiple chains. The mechanics involve a lockbox on Ethereum, where collateral is deposited and an equal amount of USDT0 is created on the destination chain.

The system has been successful, moving over $50 billion in 18 months and becoming the native gas token for an entire blockchain. However, its operators, Everdawn Labs, insist that it's not a wrapped token but rather a lock-and-mint system.