Tether (USDt) Use on Aave DeFi Protocol Skyrockets, Surpassing $7M

Thu, 05/28/2020 - 10:34
Vladislav Sopov
The Aave DeFi digital banking protocol has witnessed a huge influx of USDt liquidity used in flash loans and deposits. The net value locked in Aave has broken above $60M
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According to a press release shared with U.Today Crypto News, the amount of USDt liquidity on the Aave DeFi protocol has surged. This boosted the adoption of Aave major services, i.e. flash loans and deposits.

Liquidity matters

USDt is the fastest growing stablecoin in DeFi systems. With 7.2M USDt available on the Aave Protocol, it accounts for more than 10.2% of all in-protocol liquidity.

In particular, USDt is in high demand in flash loan services. With flash loans, users can borrow a range of ERC20 tokens without posting collateral to back those loan positions, provided that the loan is returned in the same transaction.

Typically, flash loans are used in high-frequency trading and arbitrage solutions. 

Deposits represent another high-profit opportunity for USDt liquidity users in Aave. USDt, on average, offers depositors a rate of 6.37% APY interest on their USDt without having to give up custody.

Institutional-level growth

Stani Kulechov, CEO of Aave, highlights the crucial importance of USDt in decentralized finances, in particular - for secure deposits by institutions:

No other stablecoin has grown at such a pace as USDt in the DeFi lending market space

The role of USDt in DeFi is also outlined by Paolo Ardoino, CTO at Tether, who calls his product 'the stablecoin of choice across DeFi platforms'.

This upsurge has already resulted in prominent Aave promotion amid top DeFi ecosystems. According to Defipulse, an analytics and rankings hub tracking key metrics for DeFi, Aave, with $69M locked in contracts, holds the fourth position by their metrics.

Also, Aave is the fastest growing protocol of all DeFis built on top of the Ethereum (ETH) blockchain.

About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

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