SameUSD vs Tether (USDT): A Comparative Analysis

Price volatility prevents many people from adopting cryptocurrencies for their daily use. However, stablecoins were introduced to solve this problem of volatility. Stablecoins present a reliable medium of exchange given that they are pegged to a fixed value. Crypto users quickly rallied around stablecoins to make them the industry’s focal point.

In our comparative analysis of SameUSD (SUSD) with Tether (USDT), we will look at the similarities and flaws in USDT, which is the largest stablecoin today, and how SUSD solves the issues to ensure a better crypto trading experience.

Comparative features of Tether (USDT) vs. SameUSD

The Tether (USDT) Stablecoin

Tether is the first, and arguably the most well-known stablecoin in the crypto market. It is a fiat-collateralized stablecoin that is pegged to the United States Dollar (USD). Every USDT issued into circulation is backed in a 1:1 ratio with the exact amount of corresponding fiat currency, or so they say. These fiats are held in reserves by Tether Limited.

SameUSD Stablecoin

SameUSD is a stablecoin backed by a basket of top stablecoins. It is the first of its kind in the crypto market. The SameUSD stablecoin serves as a spendable currency due to its stable value and fiat-like characteristics. With SUSD, it would be easy for crypto users to trade in the crypto market. It gives users the benefit of crypto and fiat in one cryptocurrency. SameUSD serves as the perfect digital currency since stablecoin can be used as:

  • Stable store of value.
  • The digital money for online payments and remittance.
  • A replacement of USD when executing crypto trades.

As SameUSD is backed by a basket of stablecoins, it bears the same value as $1 per SameUSD.

SameUSD vs. Tether (USDT)

In our comparison of SameUSD vs. Tether (USDT), we shall look at the following:

The underlying technology

USDT, is a multi-chain stablecoin, which is available in over five blockchain networks including Ethereum, TRON, Omni Layer Protocol, and so on. However, USDT is yet to be officially launched on the Binance Smart Chain, which is currently one of the leading blockchain networks in terms of daily transactions. On the other hand, SameUSD is available on Ethereum and Binance Smart Chain. Owning to BSC properties, SUSD transactions are faster, and cheaper.

The mechanism of stability

Tether Limited, the parent company, publicly announced that they have the USDT stablecoin pegged to the dollar. By implication, for every USDT issued, Tether Limited holds the same amount of dollars in their reserve. Despite the fact that USDT is pegged to the US dollar (i.e., 1 USDT = 1 USD), it still shows some slight volatility, as the price often rises or drops below the $1 mark.

However, SameUSD solves this slight volatile issue as it follows a unique stable mechanism. SameUSD is pegged to a basket of stablecoins, which include BUSD, USDC and USDT which ensures the stablecoin maintains a stable value not minding the state of any one of these stablecoins.

Minting mechanism

The Samecoin protocol uses Mint Smart Contract (MSC) to mint Samecoin’s stablecoins, which includes SameUSD and SameEUR. The MSC in the future will have an algorithm that converts the ratio between various stablecoins. This MSC implementation ensures that the converting balance will remain flexible. Meanwhile, Tether ought to hold millions of dollars in reserve in order to mint an equivalent amount of USDT

Trust and transparency

Trust and transparency became controversial for Tether Limited, the parent company issuing USDT. There wasn’t any third-party audit to ensure that the real-world reserve remains the same between USDT and USD, until recently. This issue spurred lots of claims that Tether doesn’t hold enough reserve for the USDT in circulation.

Following SameUSD’s stability mechanism and decentralized property, it’s easy for anyone to inspect and verify the reserve of SameUSD, and there is no secrecy because it’s nothing more than a smart contract. Also, the distribution ensures that no stablecoin within it has most of the shares. Thus, the controversy and inherent risk of fiat-backed stablecoins are avoided.

Wallet compatibility (Ease of storage)

Although both Tether (USDT) and SameUSD (SUSD) have ERC-20 compatible tokens, they support multiple blockchains and so they support various wallets of those respective blockchains.

Conclusion

In our analysis of SameUSD and Tether (USDT), we can see that SameUSD brings something significant to the market, without taking anything away from Tether. USDT has done a terrific job as the pioneer stablecoin. However, its fiat-collateralized approach has dented its image when it comes to stability, trust and transparency. The use of stablecoins as the reserve for SameUSD stablecoin eliminates any distrust in users’ minds.

As the crypto market comes of age, there are bound to be improvements, and SameUSD is an excellent improvement to the stablecoin market. With the revolutionizing technology of SameUSD, it certainly has an edge over Tether, the largest stablecoin in the crypto market.