Tether Ltd., a blockchain-powered platform that powers USDT, the world’s largest stablecoin by market cap, and Aave Protocol, an open-source and non-custodial protocol, are working cooperatively in order to promote the wider adoption of USDT in the evolving decentralized finance (DeFi) industry.
USDT is used to power a wide range of DeFi lending solutions. Data from Aave reveals that USDT offers highly competitive returns for lenders in the crypto asset marketplace. USDT offers lenders a monthly yield of 12.25%, meanwhile, MakerDAO’s Dai stablecoin, and Circle’s USDC provide a return of 8.08% and 5.7% over the same time period, respectively.
Stani Kulechov, CEO of Aave, stated:
“USDT … brings a vast amount of liquidity within the DeFi space. Together with Aave, this will help bootstrap DeFi composability via Flash Loans, lending and borrowing.”
Paolo Ardoino, CTO at Tether, noted:
“Enabling USDT holders to earn a passive income via an open lending platform such as Aave opens exciting new possibilities for the DeFi space and USDT liquidity. USDT’s use in such innovative DeFi projects is evidence of its important function in the digital currency ecosystem.”
As explained in a press release shared with Crowdfund Insider:
“USDT’s … role in the growing DeFi space is underlined by its growing use in Flash Loans, which enables customers to borrow a range of (Ethereum) ERC-20 compliant tokens without posting collateral to back those loan positions, provided that the loan is returned in the same transaction.”
As noted in the announcement:
“Flash Loans are used to take advantage of on-chain arbitrage opportunities, compete for on-chain liquidations and move open positions between DeFi platforms.”
USDT’s total market cap stands at around $4.9 billion. Tether actively works with Algorand, Ethereum, EOS, Liquid Network, Omni and Tron.