USDT in a nutshell
USDT (Tether) is a stablecoin — a cryptocurrency pegged to the US Dollar at a 1:1 ratio. It's issued by Tether Limited and is available on virtually every blockchain that matters: Ethereum, Tron, Solana, Avalanche, Arbitrum, and many more.
It's the most traded cryptocurrency by volume — yes, more than Bitcoin. That's because USDT is on both sides of almost every trade. When someone buys BTC on Binance, they're usually paying in USDT. When they sell, they receive USDT.
How USDT maintains its peg
Tether Limited claims to back every USDT in circulation with equivalent reserves. According to their attestation reports, these reserves include US Treasury bills, overnight reverse repos, cash, and other liquid assets.
The peg holds through arbitrage: if USDT drops below $1 on an exchange, traders buy it (knowing they can redeem it for $1), which pushes the price back up. If it goes above $1, people mint more USDT from Tether, increasing supply and bringing the price down.
The controversy
Tether has faced persistent criticism about its reserve transparency. For years, they didn't publish detailed breakdowns. When they did, critics noted that "cash equivalents" included commercial paper from undisclosed companies. They've since shifted heavily toward US Treasuries, which are more transparent and liquid.
In 2021, Tether paid $18.5 million to settle with the New York Attorney General over claims that they misrepresented their reserves. They didn't admit wrongdoing, but the settlement required them to publish quarterly reserve reports.
Despite the controversy, USDT hasn't lost its peg significantly in any sustained way. Traders continue to use it because the liquidity advantage is massive — no other stablecoin comes close in terms of trading pair availability.
USDT on different blockchains
USDT exists on multiple chains. The same $1 value, but different transaction speeds and costs:
- Tron (TRC-20): Cheapest to transfer. Most commonly used for person-to-person payments.
- Ethereum (ERC-20): Widest DeFi integration but highest gas fees.
- Solana (SPL): Fast and cheap. Growing DeFi ecosystem.
- Arbitrum/Optimism: Ethereum L2s — low fees, high compatibility.
Using USDT on Korvex
When you create a Korvex account, you receive demo USDT as your primary trading currency. It works exactly like it would on a real exchange — you spend it to buy BTC, ETH, or any supported pair, and receive it back when you sell. The mechanics are identical to production trading, just with virtual funds.