Tether teams with Aave Protocol to provide flash loans
Tether, a blockchain-enabled platform that powers the largest stablecoin by market capitalisation, and Aave Protocol, an open source and non-custodial protocol, are working together to bring wider adoption of Tether (USDt) as a financing tool to the nascent decentralised finance (DeFi) ecosystem.
USDt is powering a variety of innovative DeFi lending projects. According to data provided by Aave, USDt also offers the best yield for lenders in the marketplace. USDt provides lenders with interest of 12.25 per cent over a year, while over the same period MakerDAO's Dai, and Circle’s USDC offer a yield of 8.08 per cent and 5.7 per cent, respectively.
USDt’s pivotal role in the growing DeFi space is underlined by its growing use in Flash Loans, which enable customers to borrow a range of ERC20 tokens without posting collateral to back those loan positions, provided that the loan is returned in the same transaction. Flash Loans have been used to take advantage of on-chain arbitrage opportunities, compete for on-chain liquidations and move open positions between DeFi platforms. As a pioneer of Flash Loans, Aave has found USDt’s property to be the most liquid and trusted stablecoin, a powerful tool for powering this innovative form of lending.
Stani Kulechov, CEO of Aave, says: “USDt is the largest stablecoin in the market and it 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.”
“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,” said Paolo Ardoino, CTO at Tether. “USDt’s use in such innovative DeFi projects is evidence of its important function in the digital currency ecosystem.”
USDt’s total market capitalisation has more than doubled from about USD2 billion in February 2019 to about $4.9 billion today. Tether works with Algorand, Ethereum, EOS, Liquid Network, Omni and Tron. Tether is driven to support and empower growing ventures and innovation in the blockchain space.
Aave is the fastest growing DeFi protocol to date on the Ethereum blockchain. With a focus on innovation and governance, Aave Protocol thrives to empower builders and finance professionals to obtain access to new business opportunities. Aave will continue to support the USDt ecosystem as the stablecoin with the best yield in DeFi, and will continue supporting flash loans using USDt to allow instant liquidity for traders.