Paolo Ardoino, CTO of Tether, has revealed during CryptoCompare’s Digital Asset Summit today that Tether is looking to lead the stablecoin presence in the decentralized finance space.
During a keynote speech on the history of the stablecoin issuer, Ardoino revealed decentralized finance (DeFi) platforms have shown interest in its flagship stablecoin, the USDt token, and that the firm will be announcing partnerships with existing DeFI platforms.
“We want tether to be the leading stablecoin in the Defi space…” @bitfinex CTO @paoloardoino explaining where #Tether is heading at the #CryptoCompareSummit..#USDT #DeFi #Stablecoins pic.twitter.com/lrCpIN2DM4
— CryptoCompare (@CryptoCompare) March 10, 2020
In a press release sent to CryptoGlobe, Tether announced one such partnership with the open-source, non-custodial protocol Aave. The partnership will see both work together to “bring wider adoption of Tether (USDt) as a finance tool to the nascent decentralized finance ecosystem.”
Data from Aave shows that the stablecoin is providing the platform’s lenders a monthly yield that can be as high as 12.25%, while other stablecoins like MakerDAO’s DAI and Circle’s USDC are offering yields of 8% and 5.7% respectively.
The document notes that USDt’s pivotal role in growing the DeFi space could also involve the use of the so-called flash loans – loans that can be taken out without collateral, and that are paid in the same transactions they are taken.
While flash loans are mostly known for being used in attacks against another DeFi protocol, the document notes that they have been used to compete for on-chain liquidations and move open positions between DeFi platforms as well. In one of the attacks, it’s worth noting, lack of liquidity for a stablecoin helped the attacker succeed.
Paolo Ardoino commented on Tether’s influence in the space, saying:
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.
USDt’s presence in the space has been growing. In February 2019 its market capitalization was of around $2 billion, while it now stands at $4.9 billion. The stablecoin has not only been issued on the Ethereum blockchain, but also on the Omni protocol, on TRON, Algogrand, the Liquid Network, and EOS.
As CryptoGlobe reported, Tether itself launched earlier this year a gold-backed cryptocurrency called Tether Gold (XAUt). Earlier this month, it became the leading gold-backed crypto by market capitalization.