Tether (USDt) use spikes on growing DeFi interest

Tether, a blockchain-enabled platform that powers the largest stablecoin by market capitalisation, and Aave Protocol, an open source and non-custodial money market protocol, have seen a surge in demand for Tether (USDt), amid growing interest in decentralised finance (DeFi).

USDt is the biggest and fastest growing stablecoin money market in defi, with USD7.2 million worth of USDt now available on the Aave platform. USDt is enabling a stream of innovative DeFi financing products on Aave, which has a total liquidity of USD70 million with about USD60 million of locked assets in the smart contract.

Notably, there has been a ready take up of USDt 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 can be used to take advantage of on-chain arbitrage opportunities, compete for on-chain liquidations and move open positions between DeFi platforms. The products could even power High Frequency Trading strategies in crypto.

Use of USDt on the Aave platform has been driven by lending products that represent the building blocks of a nascent alternative financial system. According to data provided by Aave, USDt also offers the best yield for lenders in the marketplace. USDt on average offers depositors a rate of 6.37% APY interest on their USDt without having to give up custody.

“Aave has shown itself to be the safest place for institutions to deposit their USDt,” says Stani Kulechov, CEO of Aave. “No other stablecoin has grown at such a pace as USDt in the DeFi lending market space. Since USDt’s launch on Aave, our depositors receive the highest average yield on stablecoins with USDt. Similarly, most protocol fees have been collected with USDt and part of them redistributed back to integrators who are building new DeFi products by taking advantage of the DeFi composability.”

“USDt is playing an important role in boosting liquidity across the DeFi space,” says Paolo Ardoino, CTO at Tether. “USDt’s growing popularity is making it fast become the stablecoin of choice across DeFi platforms. As use of USDt grows for myriad purposes the world’s most trusted, stable and liquid stablecoin consolidates its central position in the digital asset ecosystem. Tether is the reserve currency of crypto and DeFi.” 

Aave Protocol’s market size has now surpassed USD69 million, with the platform in fourth place on Defipulse, an analytics and rankings hub tracking key metrics for DeFi. 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. 

USDt’s total market capitalisation has more than quadrupled from about USD2 billion in February 2019 to reach USD9 billion. Tether works with a variety of blockchains, including Algorand, Ethereum, EOS, Liquid Network, Omni and Tron. Tether is driven to support and empower growing ventures and innovation in the blockchain space.