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Research: 80% of stablecoin Tether is controlled by 300 addresses

15:21, 8 August 2019

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A recent study reported by Bloomberg on August 7 shows that the majority of the supply of the controversial stablecoin Tether is controlled by just 318 addresses.

The study into the U.S. dollar-pegged token was conducted by cryptocurrency research company Coin Metrics. According to their findings, a major share of Tether’s supply is controlled by a small number of so-called “whales” — addresses that hold over $1 million worth of the cryptocurrency.

The total supply of the coin is slightly above $4 billion, according to CoinMarketCap.

Tether

Coin Metrics only reviewed the addresses based on the OMNI and Ethereum blockchains. However, Tether is also available via several smaller ledgers, which means that the figures shown in the study are approximate.

Moreover, multiple addresses can be owned by a single person, which means that Tether could, in fact, be even more centralized than the research suggests.

Coin Metrics also revealed that Tether is widely used in transactions on major crypto exchanges — Malta-based Binance and Singapore-based Huobi — who reportedly own large amounts of the coin themselves.

According to the researchers, the centralized nature of Tether ownership might significantly increase the risks for the remaining holders. Moreover, experts cited by Bloomberg believe that the stablecoin could possibly be used to manipulate the prices in cryptocurrency markets.

In comparison to Tether, the distribution of the world’s largest cryptocurrency Bitcoin is more even. According to BitInfoCharts, more than 19,000 BTC addresses hold over $1 million worth of bitcoins.

Tether — a cryptocurrency token whose price is pegged to the U.S. dollar — was introduced back in 2015. It became the subject of controversy when its creators failed to prove that it is backed by a corresponding supply of USD. In April 2019, Tether admitted that only 74% of its coins are backed by fiat currency.

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