Conor Grogan, a director at Coinbase, recently brought attention to the minting of USDT tokens by Alameda Research, a crypto investment firm. On-chain data reveals that Alameda Research has minted a staggering 39.55 billion USDT tokens, accounting for 47% of the current circulating supply of Tether. This revelation challenges previous estimates and raises questions about Tether’s redemption process.
Earlier estimations by Protos pegged the number of minted USDT tokens at around $36.7 billion. However, Grogan’s analysis uncovered additional wallets involved in USDT minting, leading to a more accurate representation of Alameda Research’s contribution. The updated figure of 39.55 billion USDT tokens highlights the significant role played by Alameda Research in introducing USDT into the crypto ecosystem.
Grogan’s findings not only shed light on the minting of USDT tokens but also raised concerns about the redemption process. Unlike other cryptocurrencies that have transparent deposit addresses, USDT redemptions involve direct transactions with Tether’s treasury. This off-chain redemption process makes it challenging to accurately track the flow and movement of USDT tokens.
Possibility of Other Market Makers
Furthermore, Grogan speculates on the involvement of other market makers in USDT redemptions. He suggests that if all USDT redemptions from FTX were attributed to Alameda Research, they would account for an additional 3.9 billion Tether. These redemptions, particularly during the Luna implosion in May 2022, indicate a significant market impact and further emphasize the role played by Alameda Research in the USDT ecosystem.
Grogan’s revelations align with a 2021 report by Protos, which highlighted the pivotal role of market makers such as Alameda Research and Cumberland Global in introducing USDT tokens. The report estimated that these market makers received at least $60.3 billion USDT, representing approximately 55% of all outbound volume. The influence and involvement of Alameda Research in the crypto industry have been further solidified through their association with the FTX exchange and participation in various funding rounds and investments.
The minting of such a significant number of USDT tokens by Alameda Research raises questions about Tether’s circulating supply and redemption process. The updated figures provided by Conor Grogan challenge previous estimations and highlight the influential role played by market makers in the USDT ecosystem. As the crypto industry continues to evolve, transparency in token minting and redemption processes becomes crucial for maintaining trust and stability within the digital asset space.
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