USDT Interest Rates This Week: Best Returns for Tether Lending and Staking
As an investor, it is difficult to find generous returns from traditional banking products such as savings accounts. Fortunately, the cryptocurrency industry has matured and now offers low-risk investment products. Many of these products include: stablecoinThese are blockchain-based tokens whose price is pegged to fiat currency (usually US dollars).
The largest stablecoin by market capitalization is Tether (USDT). Here’s how to make the most of it:
| USDT | USDC | die | BUSD | ETH | |
| Coin Loan | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% |
| connection point | Up to 16.00% | Up to 14.00% | Up to 14.00% | – | Up to 8.00% |
| Yuhodler | 12.00% | 12.00% | 12.00% | 12.00% | 7.00% |
| Crypto.com | Up to 6.50% | – | Up to 6.50% | – | Up to 2.00% |
USDT lending platform
If you want to generate high returns while reducing volatility risk, a centralized lending platform is the ideal choice. They operate similarly to traditional online lending services or banks. You must pass a Know Your Customer (KYC) verification process before your account is approved.
We have selected three of the most reliable lending platforms that support USDT and offer high yields.
connection point
Another popular cryptocurrency lending platform is Nexo, founded in 2017. The platform offers up to 10% APY on USDT deposits. You can earn even higher APYs by choosing NEXO token rewards, which are the platform’s native token. These are some of the highest interest rates on the market today. We also like Nexo’s intuitive interface, which can make a difference for beginners.
Retail and institutional investors choose Nexo because of its compound daily payouts and flexible returns. Deposits are also backed by $375 million in insurance coverage through BitGo and Ledger.
Using NEXO tokens not only offers better interest rates, but also allows you to enjoy more free cryptocurrency withdrawals and other benefits.
US customers are no longer accepted.
Click here to see current Nexo interest rates.
Advantages and disadvantages of lending platforms
| Advantages | disadvantage |
| high yield – Cryptocurrency lending platforms offer the highest returns on USDT deposits. | centralized – Since this is a centralized platform, custody of USDT funds (private keys) must be transferred. |
| low fees – Most cryptocurrency lending platforms charge minimal fees. Chelsea, for example, claim there are no fees at all. |
USDT exchange loan
You can also earn interest on USDT loans through centralized cryptocurrency exchanges and platforms. They typically use their funds to lend funds to traders who engage in margin trading. In principle, USDT should be locked for a predetermined period of time. Well-known cryptocurrency exchanges that support USDT lending include:
Binance
Binance is the largest cryptocurrency exchange by trading volume. Since starting as a spot exchange in 2017, it has transformed into a diverse ecosystem offering futures and options trading, launchpad, liquidity farming, staking, payment options, and more.
One of its main products is Binance Earn, a one-stop solution for earning interest, including interest on USDT. The APY for USDT flexible deposits is a generous 10.00%, but the interest rate decreases rapidly as deposits increase. So if you deposit more than 2,000 USDT, the APY is only 3.00%.
Click to see current Binance interest rates.
Crypto.com
Founded in 2016, Crypto.com has become one of the largest cryptocurrency brands thanks to several high-profile partnerships, especially in the sports space. The platform provides exchange, non-fungible tokens (NFTs), payments and lending services to over 50 million users worldwide. Provides $750 million in insurance coverage for all assets. In 2021, the company partnered with Visa to settle transactions on its payment network.
The Crypto Earn product supports USDT and offers anywhere from 0.4% to 5%+ APY depending on your balance and whether you hold CRO tokens and/or are willing to store your cryptocurrency for 3 months. You can choose between flexible and fixed deposits, but the former offers lower returns. Interest compensation is paid weekly.
Click to see current Crypto.com interest rates.
Pros and Cons of Exchange Loans
| Advantages | disadvantage |
| Diverse ecosystem – Large cryptocurrency exchanges integrate all forms of cryptocurrency operations with just a few clicks. | centralized – Cryptocurrency exchanges store your funds themselves. This means you do not have complete control over your funds. |
| low yield – Most cryptocurrency exchanges offer lower returns compared to cryptocurrency lending platforms. |
USDT DeFi Lending
If you want to have complete control over your funds and not share your personal information with anyone, you can choose a DeFi (decentralized finance) lending protocol. DeFi is one of the most important trends in the cryptocurrency industry. This gives users access to financial services that are run by algorithms and powered by the blockchain, rather than managed by a centralized entity.
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Aave is the second largest DeFi protocol, with a total value locked (TVL) figure of around $8 billion. Stablecoins play a leading role in Aave, accounting for over 30% of total assets deposited.
The interest rate on USDT liquidity contributions is well over 1%. It’s much lower than the interest rates listed above, but there’s no lock-up period or minimum balance. (Usually you pay a transaction fee for sending money in and out.)
Click to see current Aave interest rates.
Complex finance
Aave’s direct competitor is Compound, which has a TVL of $4 billion at the time of this writing. The lending protocol sparked the DeFi craze in the summer of 2020 when it launched its governance token.
USDT is playing a leading role here too, with APY on USDT deposits well over 1%.
Click to see current compound interest rates.
Pros and Cons of DeFi Lending
| Advantages | disadvantage |
| decentralization – DeFi protocols are run by algorithms that completely reduce potential human error. It also does not require KYC/AML verification for users who have full control of their funds. | low yield – DeFi lending protocols offer much lower interest rates compared to centralized lending protocols. |
| High fees – part DeFi protocols built on Ethereum come with high gas fees. Nonetheless, there is a growing list of low-cost alternatives built on blockchain, including Avalanche, Polygon, and others. |
What is USDT?
USDT is a stablecoin cryptocurrency issued by Tether Limited, founded in 2014. The price of USDT is pegged to the US dollar at a 1:1 ratio. It is an ERC-20 token and is hosted on the Ethereum blockchain.
Tether claims that USDT is fully backed by reserves consisting of US dollars, cash equivalents, other short-term deposits, and commercial paper. MHA Cayman has released its latest attestation report, confirming that USDT tokens are fully supported.
At the time of this writing, USDT’s market capitalization exceeds $72 billion, making it one of the top three cryptocurrencies behind Bitcoin and Ethereum. Stablecoins have played a key role in the cryptocurrency industry, bridging the gap between blockchain and traditional finance.
Why are USDT yields so high?
Why are USDT interest rates higher when traditional savings accounts offer returns of less than 1%? This is a good question, considering that USDT’s price is pegged to the US dollar, so its volatility risk is close to zero.
Nexo and others offer better interest rates thanks to their business model where users lend their cryptocurrency to borrowers willing to pay higher interest rates. The latter is ready to use cryptocurrencies as collateral, which is not possible with traditional banks. Therefore, interest rates are rising as demand for loans against cryptocurrency collateral increases.
USDT staking vs. USDT staking loan
Staking and lending are two ways investors can profit from cryptocurrency assets without selling them. Traditional savings accounts cannot generate significant returns in today’s low interest rate environment. Fortunately, investors can instead use stablecoins like USDT for staking and lending.
The key difference between staking and lending is that the former requires users to lease their USDT to a blockchain or cryptocurrency platform in exchange for receiving rewards, whereas USDT lending requires them to lease their funds to borrowers to earn interest.
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