Distinguish between Custodial and Non-Custodial Lending:

• Custodial lending refers to lending your crypto through a centralised entity such as Binance, Kraken, Coinbase
• Non-custodial lending means that you have sole control of your private keys, and therefore control and custody of your own assets

Do not fall for high APR %: When you stake your crypto, you will usually be quoted an APR for your investment. Some lending platforms may offer very high APRs as a way to attract investors, but these high APRs may be unrealistic and involve additional risk

Safe USDT lending typically offers yields of less than 2%.

Stick to well-known DeFi protocols: Look for protocols that have liquid markets and choose protocols that have been audited by reputable auditors for added security.

The lending yield on USDT is generated from:

• Lending and Borrowing: On platforms such as AAVE, USDT token holders can contribute their USDT to liquidity pools, which can then be accessed by borrowers who provide collateral assets. These borrowers take out loans by borrowing against the collateral assets they have deposited. In exchange for the loan, borrowers pay an annual percentage rate (APR) to the token holders (i.e. lenders) who have added their USDT to the liquidity pools.

We strive to make lending as safe and transparent as possible, however, it’s important to consider factors that may influence whether a particular lending option is appropriate for you.

• Smart contract risks: Defi platforms like AAVE, have inherent risks associated with smart contracts. These contracts can be exploited or hacked by a malicious actor
• Counterparty risks: If you use a centralized lending platform, you may be exposed to counterparty risk. This is the risk that the other party in the transaction may not fulfill their obligations and default on the contract.
• Protocol security risks: The collateral for USDT may include loans and receivables from third parties, which implies a collateral risk. There is also a risk of unknown bugs in the protocol and the USDT investment in general.

Keep in mind that this is not a comprehensive list of all potential risks associated with lending.

USDT is the native token of the Tether protocol and it is used to perform various important functions within the platform.

Store of value: USDT is used as a unit of measure for value exchanged on any supported blockchain. Users can interact with it by sending it to others, buying and selling on exchanges or OTC markets, or using DeFi for lending and staking. Tether tokens enable businesses, including exchanges, wallets, payment processors, financial services and ATMs, to easily use fiat currencies on blockchains.

The total supply of USDT can increase or decrease depending on demand for the token and the actions of Tether Limited, the issuer of Tether. As USDT is pegged to the US dollar, the total supply is typically closely tied to the amount of US dollars held in reserve by Tether Limited to back the issued Tethers. It’s important to note that Tether Limited claims to hold sufficient reserves to back the outstanding Tethers, but this has not been independently audited, so the exact total supply of Tether at any given time may be difficult to verify.

There will be times when the quoted price on exchanges may trade above or below $1, but this is usually speculation based on market volatility and does not mean that USDT is not pegged at 1:1 with USD.