Ethereum News Today: Polygon Becomes Bridge for DeFi's Next Liquidity Leap

USDT0 and XAUT0 stablecoins have expanded to the Polygon blockchain, marking a significant development in omnichain liquidity solutions for decentralized finance (DeFi) and real-world assets (RWA). The integration was announced by Everdawn Labs, the operator of USDT0, in collaboration with Polygon, a leading layer-2 (L2) scaling solution for Ethereum. This move positions Polygon as the 11th network supporting USDT0, while XAUT0 joins the blockchain following its earlier deployments on TON and HyperEVM.

USDT0 and XAUT0 are omnichain stablecoins underpinned by LayerZero's Omnichain Fungible Token (OFT) protocol. Unlike the original Tether-operated stablecoins, USDT0 and XAUT0 are not directly backed by physical assets such as cash or gold. Instead, they are created by depositing USDT or XAUT into an Ethereum-based smart contract. This design allows the tokens to function as a bridge between blockchains, offering users the flexibility to access their value on multiple networks without relying on wrapped tokens or cross-chain bridges [1].

The decision to expand to Polygon aligns with USDT0's strategy to scale its ecosystem on high-liquidity, enterprise-friendly platforms. Polygon, with its robust DeFi infrastructure and over $3 billion in stablecoin liquidity, provides an ideal environment for such an initiative. According to Lorenzo R, co-founder of USDT0, the network’s recent upgrades—such as AggLayer and the Bhilai Hardfork—enhance its capacity to handle omnichain liquidity, making it a strategic choice for the deployment of both USDT0 and XAUT0 [1].

Market data indicates that USDT0 has grown rapidly since its launch in January 2025, achieving a market capitalization of nearly $1.6 billion within two months. XAUT0, although slower in adoption, has reached a market cap of $2.5 million as of the latest CoinGecko records. The Polygon integration is expected to accelerate the growth of both tokens by providing seamless liquidity and reducing transaction costs, especially for micropayments and institutional-grade applications [1].

Polygon’s native USDT0 upgrade eliminates the need for complex bridging mechanisms, as the token is now directly deployed on the network rather than through Polygon’s Proof-of-Stake bridge. This transition ensures lower fees, faster settlement times, and improved user experience. Additionally, native XAUT0 offers a new dimension of liquidity by introducing gold-backed assets into DeFi and RWA protocols. Developers on Polygon can now natively integrate XAUT0 into their applications, enabling gold-backed collateral in borrowing, hedging, and asset management strategies [1].

The integration is also a testament to Polygon’s growing role as a multichain coordination layer. With support from over 100 chain pathways, USDT0 is now live on 12 leading protocols, including Arbitrum, Ethereum, Optimism, and HyperEVM. Lorenzo R emphasized that unified liquidity is crucial for the multichain future, as it allows developers to build on a platform that supports large-scale DeFi and institutional-grade asset integration [2].

Source:

[1] Native USDT0 Comes to Polygon for Lower Fees and ... (https://polygon.technology/blog/native-usdt0-comes-to-polygon-for-lower-fees-and-deeper-liquidity)

[2] USDT0 and XAUt0 Are Now Live on Polygon - DL News (https://www.dlnews.com/external/usdt0-and-xaut0-are-now-live-on-polygon/)