Right, it never settles to Bitcoin to its hard to say it’s on Bitcoin :).
And, yea, not defending the meme, just noting that it’s really a pretty separate system that’s unlikely to materially impact bitcoin itself.
Discussion
Do you think it has the potential to impact LN in terms of fees or anything else? If there are more periphery swaps and transfers through the network, it might impact network-wide scale and fees. But only if the interest/scale of USDT over LN is big.
Seems to me they will likely just open private channels with the large liquidity providers. Possibly public though if they want to earn regular routing fees
At scale I’m very skeptical that it keeps using swaps. Why would it? Costs nothing to build your own network built on USDT, hell, you could even allocate liquidity with zero cost, unlike BTC lightning.
If it’s small maybe it’ll drive a bit more volume, if it’s large I’m skeptical. Maybe gets some USDT folks into wallets that can pay a lightning invoice, but I’m not sure that drives much lightning usage either, tbh.
*if* they manage to largely supplant existing tether usage (not sure why they would unless the fees are a ton lower, so maybe, unlikely?) then maybe it drives enough merchants that support receiving payments over LN invoices that it drives the ability to pay with lightning broadly, but that seems quite a ways off and SOL is ETH L2s are way ahead.
First they need someone to build a good consumer wallet, which is at least a few years of work.
Another possible outcome is that this normalizes LSPs doing KYC for swaps and totally fucks the ability of Bitcoin-only LSPs to operate without KYC…
