Polygon, a layer-2 (L2) scaling solution for Ethereum, is preparing to upgrade to the USDT0 standard, a unified liquidity network that introduced the omnichain versions of Tether’s USDT and XAUT.
USDT0 (USDT0) and XAUt0 (XAUt0), cross-chain liquidity stablecoins backed by LayerZero’s Omnichain Fungible Token (OFT), are set to launch on the Polygon blockchain, as announced by USDT0 operator Everdawn Labs to Cointelegraph on Wednesday.
This integration represents a significant milestone for XAUt0, making Polygon its third blockchain integration, following its debut on TON and Hyperliquid’s HyperEVM.
For USDT0, Polygon becomes the 11th supported blockchain, highlighting the stablecoin’s design to serve as the “interoperability backbone” for Tether USDt (USDT), according to USDT0 co-founder Lorenzo R in an interview with Cointelegraph.
What are USDT0 and XAUT0?
Contrary to the underlying Tether-operated stablecoins — dollar-pegged USDT and gold-backed XAUT (XAUT) — USDT0 and XAUT0 are not directly asset-backed. They are minted by depositing USDT or XAUT into a specific contract on Ethereum.
“USDT0 operates on top of Tether’s core infrastructure, allowing users and chains to access their USDT tokens on their preferred networks,” Lorenzo R explained to Cointelegraph in May.
Tether USDt (USDT) versus USDT0 (USDT0). Source: USDT0
USDT0, the omnichain version of USDT, launched in January 2025, over a decade after Tether USDT debuted as Realcoin in October 2014.
XAUT0 followed shortly after, with USDT0 announcing its first deployment on the TON blockchain in early June 2025.
Why Polygon?
Since its launch in January, USDT0 has rapidly expanded, with market capitalization increasing to nearly $1.6 billion within two months. In contrast, XAUT0 has grown more slowly, reaching just $2.5 million in market cap, according to CoinGecko data.
USDT0 selected Polygon to expand its ecosystem due to its evolution into “one of the strongest ecosystems” for stablecoin payments, decentralized finance (DeFi), and enterprise adoption, Lorenzo R told Cointelegraph.
Related: Coinbase predicts trillion-dollar stablecoin era by 2028
“With over $1 billion in USDT liquidity and more than 6 million wallets, Polygon provides the scale and community necessary to establish USDT0 as the default transfer standard,” he stated.
“It’s important to note that PoS USDT [the current USDT on Polygon] will transition to USDT0; the contract address will remain the same, but the token will become integrated into the USDT0 network,” Lorenzo R added, referring to a Polygon contract address holding 1.3 billion tokens.
USDT0 and XAUt0 supply and market capitalization as of Wednesday. Source: USDT0, CoinGecko
Moreover, advancements in Polygon’s infrastructure, such as AggLayer and Bhilai Hardfork, make the network a “perfect home for omnichain liquidity,” Lorenzo R observed.
“By launching both USDT0 and XAUt0 on Polygon, we’re creating seamless stablecoin pathways and introducing native gold-backed liquidity into a widely adopted blockchain — an ideal fit for DeFi, payments, and institutional-grade RWA [real-world asset] adoption,” he explained.
According to Lorenzo R, integrating with Polygon marks USDT0’s second upgrade exceeding $1 billion, following its integration with Arbitrum.
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The supply of USDT0 and XAUt0 locked on Ethereum corresponds to the total issued amount of the omnichain tokens across networks since Ethereum serves as their “LockBox” chain, from which USDT and XAU enter the USDT0 ecosystem, he concluded.
The announcement arrives as the stablecoin market continues to gain traction. Tether’s USDT — the largest stablecoin by market capitalization — surpassed $167 billion in mid-August, while its gold-backed token XAUT exceeded the $1 billion threshold for the first time on Aug. 8.
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