Tether's on-chain ecosystem layout of stablecoin giant

In recent years, Tether has become a leading company in the stablecoin industry with the global circulation of USDT. Relying solely on government bond interest, Tether can earn an annual profit of 13 billion dollars, making it one of the most profitable fintech companies in the world. However, while sorting out its business model, Tether found that although it has gained substantial profits from the issuance and management of USDT, the true "on-chain economic profit sharing" has not been in its hands.

In the daily Gas fees collected by Ethereum, USDT contributed nearly $100,000, accounting for over 6% of the total Ethereum transaction fee consumption. On the TRON network, the influence of USDT is even more astonishing. The latest on-chain data shows that USDT's transaction volume and Gas consumption on TRON account for over 98% of the public chain, indicating that the trading prosperity of TRON is almost entirely supported by USDT.

The Tron network currently generates over $2.1 million in on-chain revenue daily, with an annualized income reaching $770 million. The vast majority of this comes from high-frequency transfer fees of USDT. The total number of on-chain transactions on the Tron network within 24 hours reaches as high as 2.46 million, with an average transaction fee of approximately $0.85, which is basically consistent with the on-chain average rate of USDT. Currently, the overall market capitalization of Tron has exceeded $25 billion, and its stable on-chain revenue scale has long ranked among the top of various public chains.

For Tether, this is a typical "value capture imbalance". The issuance and branding of USDT have brought enormous user traffic and industry-level stable demand, but all on-chain fees and ecological dividends are long-term "taxed" by the infrastructure rather than being led by Tether itself. This not only weakens Tether's strategic voice in the future on-chain payment and settlement networks but also leaves it passive in the face of new threats such as self-developed stablecoins by TRON and even traffic diversion.

If it is only satisfied with being a "super mint" for stablecoins, and does not have a leading role in on-chain infrastructure, Tether's future value ceiling will be extremely limited. This is also the fundamental reason why Tether is fully committed to its own stablecoin chain ecosystem. Through a dedicated chain model, Tether can not only "reclaim its own system" the massive transaction fees and ecological dividends that would originally flow to other public chains, but also establish its own on-chain closed loop in areas such as B2B payments, compliant settlements, and industrial collaboration.

More importantly, TRON is currently trying to reduce its dependence on USDT. Recently, TRON launched the USD1 stablecoin. The founder of TRON is also an advisor to this DeFi project and is the "top brother" of TRUMP coin, indicating a complex relationship between the two parties, which seems to suggest that TRON may intend to gradually decrease its use and issuance of USDT in the coming years.

In addition, in terms of transaction fee costs, the advantages of Tron as a stablecoin settlement network are also gradually diminishing. Without purchasing and burning TRX, the current transaction fee for Tron even exceeds that of the traditionally expensive Bitcoin network, and is higher than that of the Ethereum mainnet, Apots chain, and BNB chain.

This is not good for USDT, as the transfer fee for USDC via the Base network is only $0.000409 in comparison. Even the Circle Paymaster feature launched by Circle allows users to pay gas fees using USDC on Arbitrum and Base networks.

Therefore, these trends and competitive threats force Tether to adjust its business strategy as soon as possible.

Plasma: The Source of Anxiety for Tron

Tether's first step was to quietly support a new chain called Plasma by the end of 2024.

Initially, there were only a few announcements and a few rounds of financing—Bitfinex, Founders Fund, Framework, and other capital injected a total of 24 million USD, and then brought in 3.5 million USD in external funding, pushing Plasma's valuation to 500 million USD in just two months.

Plasma treats the Bitcoin mainnet as the ultimate settlement layer, inheriting the security of UTXO, and is directly compatible with EVM at the execution layer. Most importantly, all on-chain transactions can be paid for gas directly with USDT, making USDT transfers completely free.

It is precisely because of the simple and direct selling point of "zero fees" that when the official released the governance token XPL quota allowing users to provide liquidity recently, the first batch of $500 million was snatched up in just a few minutes, and the additional $500 million deposit limit was sold out within 30 minutes. Some large holders even paid $100,000 in gas fees on the Ethereum mainnet to grab the opportunity early. This shows the market's desire for a "no-fee stablecoin chain."

In addition to the technical architecture, Plasma has quietly incorporated two chips. The first is "native privacy". On-chain transfers are public by default, but if users need to obscure the address and amount, they can simply check an option in the wallet to enter the concealment mode; when faced with audit or compliance requirements, selective disclosure can also be chosen. The second is "Bitcoin liquidity". Plasma promises to seamlessly bring native BTC on-chain through a permissionless bridge, allowing low-slippage exchanges and BTC-collateralized borrowing of stablecoins to be completed in the same environment, in conjunction with Tether's deep USD pool.

This coincides with Tether's actions of "stockpiling Bitcoin" over the past year. The Plasma team and Bitfinex partners have long been advocates of Bitcoin.

In the spring of 2025, Tether announced that it would become a major shareholder of Twenty One Capital, a company that is listed on Nasdaq through a merger and acquisition, which is a Bitcoin financial company similar to MicroStrategy.

Tether invested $458.7 million to increase its holdings of BTC and transferred 37,000 bitcoins to a new address, providing ammunition for Twenty One Capital. Currently, Tether and Twenty One Capital together hold approximately 137,000 bitcoins, ranking third among all publicly traded companies holding bitcoins, only behind MicroStrategy and mining company MARA Holdings.

The outside world was originally puzzled by what Tether aimed to gain by converting stablecoin profits into "digital gold". Now the answer is becoming clear: USDT serves as the settlement currency, while BTC acts as the reserve asset. The two converge in Plasma, gathering the $150 billion USDT scattered across more than a dozen networks into a unified settlement layer, allowing transfers, exchanges, and redemptions to occur on Tether's own territory.

At the launch of the mainnet test version, Plasma will rank as the ninth largest blockchain globally in terms of stablecoin liquidity, valued at 1 billion USD.

In the past, Tether had to follow the pace of Ethereum and Tron. Once the other party raised fees or changed rules, USDT could only passively comply. The infrastructure supporting USDT, such as settlement, execution, and bridging, represented by (, was largely beyond Tether's control. However, now Plasma has integrated issuance, circulation, and redemption into its own ecosystem, and Tether will gain more pricing power and voice, logically holding the tollgate of this network.

![Left hand Plasma right hand Stable, Tether's stablecoin empire expands])https://img-cdn.gateio.im/webp-social/moments-62430c9c14eebdb1e86d83bbf5eb5e29.webp(

How much can Plasma earn Tether in a year?

Although Plasma offers zero fees for USDT transfers, it does not mean that Plasma has no revenue.

The reason Plasma dares to tell users "USDT transfers are completely free" is not because Tether is subsidizing with real money, but because it breaks down transactions into two billing methods based on complexity and priority. To put it in simple terms, it's like saying "children under 1.2 meters are free."

Ordinary USDT transfers occupy a small block, just like "children under 1.2 meters tall"; nodes directly package such transactions into blocks without charging users Gas. However, to prevent spam transactions, Plasma has a basic throughput limit. At the same time, to avoid malicious transaction spamming, users also need to leave a small deposit on-chain, serving as collateral: once the abuse threshold is triggered, this deposit will be automatically forfeited. This way, it preserves the "free" experience while blocking spam traffic.

Requests that go beyond simple transfers, such as more complex operations like calling multiple contracts at once, batch settlements, and institutional-level instant settlements, will be recognized by the system and will require a fee. The main income for Plasma nodes comes from this, along with the small fees collected from cross-chain asset transfers and custodial services, giving the entire network self-sustaining capabilities. Moreover, since simple transfers are no longer charged, the pricing model can be more flexible: based on current on-chain estimates, thousands of free payments per second consume very low resources, allowing nodes to cover costs and maintain a surplus with a small number of high-level transactions.

The mechanism is supported by Plasma's "dual-layer framework". The lower layer periodically anchors the block state back to Bitcoin, outsourcing security to BTC's proof of work; the upper layer is directly compatible with EVM, allowing developers to migrate Ethereum contracts to run. By eliminating traditional Gas calculations, the execution efficiency is actually higher. In Messari's evaluation report, it was mentioned that the improved consensus of Plasma can stably handle thousands of transactions on a single-core CPU during stress tests, and node rewards come entirely from that part of complex transactions.

So how does Plasma make money? The answer is already apparent.

First, enterprise-level "dedicated lines" – if cross-border remittance companies or game publishers want to push transfers from millisecond level to sub-millisecond level, they need to enter the paid lane and pay a fixed monthly fee in USDT to ensure bandwidth.

Second, contracts and batch settlement - DeFi protocols call complex logic and still require gas fees, but the pricing unit changes from ETH to USDT.

Third, bridging and custody - transferring assets from other chains to Plasma or redeeming from Plasma requires a small export tax, which goes into the Plasma treasury and is then distributed to nodes and the foundation according to the rules.

Fourth, governance token XPL inflation - validators staked XPL earn block rewards, and a portion of the Plasma treasury is reserved for auction over time, used to continuously subsidize the 0 gas payment for peer-to-peer USDT.

The combination of the four is enough to offset the network costs of free transfers and may even bring a whole new cash flow to Tether.

If Plasma can successfully capture the majority of USDT traffic currently running on TRON and Ethereum, the first direct income will be the majority of the on-chain transaction fees taken by TRON and Ethereum—annual revenue could reach around 1 billion to 2 billion dollars, plus enterprise services and cross-chain fees, the additional income range is expected to reach 1.2 billion to 3 billion dollars.

But due to Plasma's exemption from regular USDT transfer fees, it is conservatively estimated that Plasma can bring Tether an annual income of 1 billion USD.

Additionally, Plasma may have other implicit benefits and ecological spillovers: for example, attracting new large liquidity and project participation, collecting certain "taxes"; providing SDKs and enterprise node access, charging commercial fees for on-chain applications, etc.

Comparing this new cash leg with Tether's existing ledger makes it more intuitive: In 2024, of Tether's approximately $13 billion in revenue, $7 billion comes from government bond interest, $45 million comes from a 0.1% issuance/redemption fee, and nearly $6 billion is from investment gains in Bitcoin, gold, and early projects. This means that Plasma could potentially raise Tether's annual profit by another 15% - 20%.

![Left hand Plasma, right hand Stable, the empire of Tether's stablecoin expands])https://img-cdn.gateio.im/webp-social/moments-a5c7f66eba6ce5f50b903667dd3e6608.webp(

Stable: A USDT L1 dedicated chain tailored for institutions

After Plasma brought the on-chain liquidity of these large holders and the developer ecosystem into its fold, Tether did not stop there. This month, an L1 chain supported by the unified liquidity protocol USDT0 from Bitfinex and USDT was officially announced, with Tether CEO Paolo Ardoino as an advisor for the project.

Unlike Plasma, which is a Bitcoin L2, Stable is an L1 chain. Although it also uses USDT as gas and offers free peer-to-peer USDT transfers, it targets a completely different audience: global financial institutions, corporate settlements, bulk clearing, on-chain corporate finance, B2B cross-border transactions, and so on.