Tether (USDT) and Compound Protocol on Pool of Assets with algorithmically Derived Interest RatesJune 17, 2020
Reportedly, Tether (USDT) has become the second largest Altcoin behind the Ethereum tokens. Tether is a blockchain enabled platform. It is the largest stable coin in terms of market capitalization.
There is an ongoing eclipse between Ripple XRP and Tether USDT making it possible for Tether to overtake Ripple. It might likely become the second largest Altcoin backing Ethereum tokens.
Obviously, the market conditions have been challenging during 2020 since the dawn of the pandemic. There have been extreme levels of market volatility. USDT is continuing to play a very important role in terms of serving to be the valuable source of liquidity in the major source of liquidity in the space of Decentralized Finance.
The field of alternative financial system is growing and several flash loan products are flourishing.
Paolo Ardoino, CTO of Tether recently tweeted: “Governments keep printing.”
Many acknowledge that they are aware of the consequences of governments who keep printing and report that being the obvious reason for why they are in to Bitcoin. They know governments are going to continue printing Tether out of thin air.
Meanwhile Compound has reportedly offered highest yields on USDT. Reportedly, the total locked value is up by $40 million in two days.
For those who are not aware, Compound is an algorithmic autonomous interest rate protocol particularly built for developers. This is the money market protocol that is decentralized. This protocol particularly permits users to frictionlessly exchange the time value of the Ethereum Assets.
Sydney Ifergan, the crypto expert tweeted: “Tether (USDT) sure knows how to work around market dynamics, borrower dynamics, and borrowing to ultimately deliver the liquidity.”
Tether (USDT) and Compound Protocol
Tether (USDT) is already a market favorite to investors, speculators, traders and exchanges. Exchanges like Poloniex and Bitfinex provide for trading blockchain assets on margins and the borrowing markets in built in to the exchange.
However, these are trust based methods and the investors trust that the exchange will not be hacked. Investors believe that the exchange will not run away with the money. However, when it comes to decentralized systems a significant amount of costs are forced onto the users. And, lenders are having to post, manage and supervise the collateralized and uncollateralized loans.
The compound Protocol are working to enable frictionless borrowing of Ethereum tokens without the flaws of existing approaches. Thereby, facilitating a positive-yield approach for the process of storing assets. Some of the Tether (USDT) investors indirectly interact with the Compound Protocol, which focuses on establishing money markets that are pool of assets with algorithmically derived interest rates.