Tether (USDT) on Tuesday announced a strategic investment in LayerZero Labs, the company whose interoperability protocol powers the cross-chain version of the world's largest stablecoin.
Financial terms were not disclosed, and Tether did not respond to request for comment on the deal size.
The investment comes during a busy stretch for Tether Investments, which deployed more than $250 million across three separate deals in the first week of February alone.
What Happened
LayerZero Labs develops a bridging protocol that allows digital assets to move across different blockchains without creating wrapped tokens or fragmenting liquidity. The technology has been adopted by Everdawn Labs to build USDt0 - an omnichain version of USDT that lets the stablecoin extend onto networks where it is not natively issued.
Since its launch roughly twelve months ago, USDt0 has facilitated more than $70 billion in cross-chain value transfers, according to both companies. LayerZero's Omnichain Fungible Token standard also underpins XAUt0, a cross-chain version of Tether's gold-backed token.
LayerZero raised $135 million in a Series B round in March 2022 at a $1 billion valuation. The protocol now supports institutional applications, including Fireblocks' tokenization engine across more than 150 blockchains.
"Tether invests in infrastructure that is already delivering real-world utility," said Paolo Ardoino, CEO of Tether. Bryan Pellegrino, CEO of LayerZero, called the deal "the ultimate validation."
Tether's Spending Spree
The LayerZero deal is the fourth investment Tether has announced this month. On Feb. 5, the stablecoin issuer disclosed a $150 million stake in Gold.com for a 12% ownership position and a $100 million equity investment in Anchorage Digital, America's first federally chartered digital asset bank.
A day later, Tether revealed a separate investment in t-0 network, a USDT-powered settlement platform for licensed financial institutions.
Combined with the LayerZero deal - whose value remains unknown - Tether's February investments total at least $250 million in disclosed capital.
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Why It Matters
The investment is notable because Tether is effectively backing the infrastructure its own stablecoin depends on for cross-chain distribution. That creates a financial alignment between the two companies beyond a standard technology partnership.
However, a few details remain thin. The deal amount is undisclosed, and the specific terms of the arrangement - whether Tether acquired equity, tokens, or some other structure - have not been made public.
Tether generates substantial profits from the reserves backing USDT's roughly $140 billion supply, giving it significant capital to deploy. The pattern of recent investments suggests the company is building a vertically integrated ecosystem around stablecoin payments, settlement, custody and cross-chain movement.
Whether that concentration of infrastructure ownership raises questions about decentralization in the long run is a separate conversation - but it is one the industry will likely revisit as Tether's investment portfolio grows.
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