Tether’s CTO hopes a new EOS-Bitcoin interoperability bridge could one day make tether cheaper and faster because users will be able to make transactions on less-congested blockchains.
Paolo Ardoino, who is also the CTO of Tether’s sister company, crypto exchange Bitfinex, told CoinDesk this is part of the reason he has been working with the team behind the token wrapper project, pTokens, to develop an interoperability bridge between the Bitcoin and EOS networks.
Launching Friday, the company will initially support a bitcoin wrapper on the EOS mainnet – pBTC. Essentially, a user will be able to deposit funds in one network, say Bitcoin, and pToken will issue the user the equivalent amount of “wrapped” tokens on the new network. The company hopes to support a bridge between litecoin and EOS, as well as EOS and ethereum.
An EOS wrapper for a tether ERC20 token is currently being planned, according to pTokens’ website. Founder Thomas Bertani told CoinDesk there were no plans yet to consider developing an EOS wrapper for tether on Omni, a secondary layer on top of the Bitcoin protocol.
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A key benefit of interoperability is users can better leverage the different characteristics of different blockchains, Ardoino said. One of the initial reasons Tether created an ERC20 version in 2017 was so it could sidestep the congested Bitcoin network.
“Omni was costing a lot of money, up to $500, Ethereum wasn’t so saturated, so the fees were cheap. Every trader would have preferred to move the funds onto the Ethereum blockchain because it was cheaper and faster,” Ardoino said.
Ethereum speeds slowed due to network congestion by the end of 2017, however. Creating an interoperability bridge between it and EOS – which has higher throughput and much less chain activity – essentially provides users with a “backup” option, so they can continue to trade with minimal fees and quick settlement times, he claimed.
Many crypto exchanges, including Bitfinex, already offer users two different types of tether, so the ability to swap between protocols already exists in some form. However, interoperability bridges make it easier for users themselves to move between the different protocols.
Ardoino foresees Bitfinex and Tether will continue to perform chain swaps. Major exchanges looking to swap $10 million worth of tether between two chains will always be able to organize it with them directly, he said.
But, he added, greater interoperability will allow retail investors with smaller amounts of tether to also shift freely between the different blockchains.
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Ardoino hopes his involvement with pTokens might encourage other developers to build bridges to other protocols, creating greater connections between all the different chains. Enhancing interoperability may one day act as the bridge for tether to launch on many other new protocols, he added.