Tether, the USD-backed stablecoin that has a market cap of around $10 billion, has seen a notable spike in volume of DeFi platform Compound, which offers decentralised lending.
The USDT market on Compound has risen substantially compared to other offerings on the platform, with its enticing yields being a key factor in its rise to $206 million.
“Tether is an extremely useful asset in the Compound ecosystem, and has quickly become one of the most liquid markets in the Compound protocol and accordingly across all of DeFi,” said Calvin Liu, Strategy Lead at Compound. “USDt’s growth on Compound has been faster than the growth of any other asset in the protocol, by multiples.”
Bitfinex CTO Paolo Aroino, who was recently interviewed by Coin Rivet, added: “Compound and its peers are driving a nascent alternative financial system that is disintermediating the need for banks and trusted, centralised third parties,
COMP incentive mechanism probably could make a lending-and-borrowing cycle and eventually raise the leverage of whole market. It's quite interesting to witness what's going on next for Compound to deal with the COMP selling pressure.https://t.co/fxKbIFMzAd
— Da Hongfei (@dahongfei) June 16, 2020
“As the most liquid, stable and trusted stablecoin, we are gratified that Tether is playing such an important role in the Compound protocol. Tether is becoming the reserve currency of DeFi.”
USDt lenders yield more than 11% while borrowers are paying over 17%. USDt has US$206 million supply, US$129 million borrowing, representing 2,704 suppliers and 592 borrowers, according to data provided by Compound.
In addition to it’s Ethereum-based version of USDt, there are versions of USDt that work on Algorand, Ethereum, EOS, Liquid Network, Omni and Tron. Tether is driven to support and empower growing ventures and innovation in the blockchain space. USDt has grown to a market capitalization of US$9.8 billion, dwarfing the size of rival stablecoins by market capitalization, trading volume and number of users.
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