Polygon, an Ethereum layer-2 (L2) scaling solution, is set to upgrade to the USDT0 standard, which introduces a unified liquidity network featuring the omnichain versions of Tether’s USDT and XAUT.
USDT0 (USDT0) and XAUt0 (XAUt0), cross-chain liquidity stablecoins enabled by LayerZero’s Omnichain Fungible Token (OFT), are launching on the Polygon blockchain, according to an announcement from USDT0 operator Everdawn Labs to Cointelegraph on Wednesday.
This integration represents a significant milestone for XAUt0, as Polygon becomes its third blockchain integration, following its launch on TON and Hyperliquid’s HyperEVM.
For USDT0, Polygon becomes the 11th supported blockchain, reinforcing the stablecoin’s role as the “interoperability backbone” for Tether USDt (USDT), as stated by USDT0 co-founder Lorenzo R to Cointelegraph.
What are USDT0 and XAUT0?
In contrast to Tether’s traditional stablecoins — dollar-pegged USDT and gold-backed XAUT (XAUT) — USDT0 and XAUT0 are not directly asset-backed by cash or gold. They are minted by depositing USDT or XAUT into a designated contract on Ethereum.
“USDT0 operates on the foundational Tether infrastructure, enabling users and chains to access their USDT tokens on their preferred networks,” Lorenzo R explained to Cointelegraph in May.
USDT0, the omnichain version of USDT, launched in January 2025, over a decade after Tether USDT first appeared as Realcoin in October 2014.
XAUT0 followed shortly, with USDT0 announcing its initial deployment on the TON blockchain in early June 2025.
Why Polygon?
Since its January launch, USDT0 has rapidly expanded, with a market capitalization growing to nearly $1.6 billion within two months. In contrast, XAUT0 has seen slower growth, achieving just $2.5 million in market cap, according to CoinGecko data.
USDT0 opted to expand its ecosystem on Polygon due to the network’s evolution into “one of the strongest ecosystems” for stablecoin payments, decentralized finance (DeFi), and enterprise adoption, Lorenzo R shared with Cointelegraph.
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“With more than $1 billion in USDT liquidity and over 6 million wallets, Polygon offers the scale and community necessary to establish USDT0 as the standard for transfers,” he remarked.
“It’s important to note that PoS USDT [the current USDT on Polygon] will transition to USDT0; the contract address will remain the same, while the token will integrate into the USDT0 network,” Lorenzo R added, referring to a Polygon contract address containing 1.3 billion tokens.
Moreover, Polygon’s advancements like AggLayer and the Bhilai Hardfork position the network as an “ideal home for omnichain liquidity,” Lorenzo R mentioned.
“By launching USDT0 and XAUt0 on Polygon, we’re creating seamless stablecoin pathways and bringing native gold-backed liquidity to one of the most utilized blockchains — an ideal fit for DeFi, payments, and institutional-grade RWA [real-world asset] adoption,” he stated.
Lorenzo R noted that Polygon integration marks the second upgrade surpassing $1 billion for USDT0, following the Arbitrum launch.
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The supply of USDT0 and XAUt0 locked on Ethereum corresponds to the total issued amount of omnichain tokens across networks, as Ethereum serves as their “LockBox” chain, or the source from which USDT and XAU enter the USDT0 ecosystem, he added.
This announcement arrives as the stablecoin market continues to flourish. Tether’s USDT — the leading stablecoin by market cap — exceeded $167 billion in mid-August, while its gold-backed token XAUT surpassed the $1 billion milestone for the first time on Aug. 8.
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