How It Works

The USDT0 Network operates on a robust lock-and-mint mechanism powered by the Omnichain Fungible Token (OFT) standard. This system ensures secure and efficient cross-chain transfers while maintaining full asset backing across all USDT0 products.

Lock-and-Mint Architecture

All tokens follow the same fundamental process:

1. Locking Assets: The original asset (USDT, XAUT, or CNHT) is locked in the OFT Adapter smart contract on Ethereum Mainnet.

2. Minting on Destination Chains: Equivalent tokens (USDT0, XAUT0, or CNHT0) are minted on the target chain, maintaining a strict 1:1 backing with the locked assets on Ethereum. This ensures complete transparency and trust.

3. Seamless Cross-Chain Transfers: Our advanced omnichain messaging layer enables smooth and cost-effective transfers between supported chains. By eliminating reliance on fragmented liquidity pools and traditional bridges, users experience fast and reliable transactions.

4. Redemption: Tokens can be redeemed by burning them on any chain and unlocking the corresponding assets on the Ethereum OFT Adapter. This ensures a consistent and secure relationship between the locked and minted assets.

Role of the OFT Standard

The Omnichain Fungible Token (OFT) standard developed by LayerZero facilitates interoperability across chains. The OFT model provides a universal framework for cross-chain messaging and token management. Key advantages include:

Unified Liquidity Management

The OFT standard ensures that liquidity is efficiently managed across all connected chains, reducing fragmentation and improving capital efficiency. Instead of duplicating liquidity across multiple wrapped versions or bridge pools, USDT0 maintains a single source of truth on Ethereum.

High Security

Transactions are validated through a decentralized network of oracles and relayers, maintaining integrity and reducing risks. Cross-chain actions are verified independently, ensuring robustness and minimizing attack vectors.

Scalability

The OFT model supports seamless expansion to new blockchains, allowing our products to integrate with emerging ecosystems effortlessly. As new chains gain adoption, our network can onboard them without fragmenting existing liquidity.

Efficiency

By eliminating the need for intermediary bridges or wrapped assets, the OFT standard reduces complexity and operational overhead. Users benefit from simpler transactions, lower fees, and faster settlement times.