Tether (USDT) TRC-20 vs ERC-20: Difference in USDT Networks

Tether (USDT) is one of the most popular stablecoins used for entry and exit from trading positions, and its stability makes it ideal for hedging against volatility. USDT is issued on multiple blockchains, each pegged to the US dollar but with unique features. The most notable are Ethereum (ERC-20) and Tron (TRC-20).

Here’s what many get wrong: the blockchain you choose to send, receive, or trade USDT on can significantly impact your costs and transaction speed.

So, which should you use?

Well, dive into this guide, where we break down the key differences between ERC-20 and TRC-20 USDT so you can transact with USDT more efficiently and avoid unnecessary costs.

What is Tether (USDT)?

What is Tether (USDT)?

At its simplest, USDT is the US dollar on the blockchain or on-chain dollar, issued by a company called Tether. Each unit of USDT is designed to be worth $1 and is backed by real-life US dollars held in reserves.

Craig Sellars, Brock Pierce, and Reeve Collins founded the stablecoin in July 2014, and it was initially known as “Realcoin.”

Tether was created to solve two major issues with existing cryptocurrencies: high volatility and on-chain convertibility between fiat and cryptocurrencies.

Today, USDT is used to make borderless purchases and payments, as well as trading and investing, thanks to its stable nature.

A Quick Look at Token Standards

A token standard is a set of rules that guide how tokens are designed, issued, and function on a particular blockchain.

Tether issues USDT on different blockchains while following the token standard of each chain.

Look at it from the angle of operating systems on computers and smartphones. Developers build different versions of their software for Windows, Linux, and MAC or Android and iOS devices.

For instance, Instagram on iPhones (iOS) and Android devices is the same Instagram but runs on different operating systems.

Alright, back to blockchains, they are designed for different primary purposes and can have varying consensus mechanisms. Even chains with similar consensus mechanisms may implement them differently. 

Some chains focus more on speed and scalability, while others focus on security and decentralisation.

This determines the transaction processing speed and gas fees paid on blockchains, which affect tokens issued on these networks.

ERC-20 and TRC-20 are two examples of token standards, which are the focus of this piece. Let’s get to them.

What is ERC-20 Tether?

Tether ERC-20 is USDT issued on the Ethereum network following the ERC-20 standard, which is Ethereum’s fungible token standard and guides token creation, operation, and function.

This means ERC-20 USDT is the version of USDT used across the Ethereum ecosystem, as it is compatible with other tokens, dApps, and DeFi protocols built on Ethereum and Ethereum-enabling wallets.

This makes it a popular choice for crypto investors who want to keep their value within the Ethereum ecosystem.

What is Tether TRC-20?

TRC-20 USDT is the version of Tether’s USDT issued on the TRON network. It is the USDT version of choice for all transactions happening on the TRON ecosystem. TRC-20 is the fungible token standard of the TRON blockchain. 

What Is The Difference Between The Tether Networks: TRC-20 vs ERC-20

What Is The Difference Between The Tether Networks: TRC-20 vs ERC-20

Now that you understand Tether ERC-20 and TRC-20, let’s highlight their key differences based on essential factors.

• Address Style: One of the key differences between ERC-20 and TRC-20 is their address format. ERC-20 tokens use Ethereum addresses that start with ‘0x‘ (e.g., 0xbd7e…), while TRC-20 tokens use Tron addresses that typically begin with ‘T‘ (e.g., T9zP14…).”
• Network: ERC-20 tokens are issued on the Ethereum network; meanwhile, TRC-20 tokens are issued on the Tron network.
• Transfer Speed: The Tron network has a higher transaction per second (TPS) rate than Ethereum, so transacting with TRC20 tokens is faster than with ERC20 tokens. ERC-20 transactions can take longer, but the TRC-20 is faster and ranges from just a few seconds to a few minutes. 
• Fees: TRC-20 tokens generally have lower transaction fees than ERC-20 tokens.  Due to factors like consensus mechanisms and processing speed, transactions on Tron are cheaper than those on Ethereum. 

Frequently Asked Questions: TRC-20 vs. ERC-20

Which is Better: TRC20 or ERC20?

It depends on your needs and priorities. TRC-20 (on the Tron blockchain) offers lower transaction fees and faster transfers, while ERC-20 (on Ethereum) can access a wide array of DeFi opportunities.

How Do I Know If My USDT Is ERC-20 or TRC-20? 

Check the wallet address format: ERC-20 USDT addresses start with “0x” (Ethereum network). TRC-20 USDT addresses start with “T” (Tron network). You can check for these indicators on the exchange or wallet where you received the USDT.

TRC20 vs. ERC20  Fees 

TRC-20 USDT fees are typically less than 1 USDT, while ERC-20 USDT fees are higher, often ranging from a few dollars to $20+, depending on network congestion. 

Can I Transfer TRC-20 USDT to an ERC-20 Wallet?

No, you cannot send TRC-20 USDT to an ERC-20 wallet directly. 

You must use a bridge or exchange to convert the tokens between networks. 

What Is USDT ERC-20? 

USDT ERC-20 is Tether’s stablecoin issued on the Ethereum blockchain, following the ERC-20 token standard. It is widely used in DeFi and supported by many wallets and exchanges.

Closing Thoughts 

Tether’s USDT market cap is currently well over $100 billion, which is a testament to its significance and usefulness.

The total supply is split between different blockchains; two of the most significant are Tron and Ethereum, through the TRC-20 standard and ERC-20 standard, respectively.

The differences in the blockchains of these token standards determine their transaction speed and fees, which is crucial to know as you decide which is more suitable for your needs when transacting with USDT.