USDT Lending Surges on Aave Amid Fluctuations in Stablecoin Markets

June 15, 2023 at 12:56 PM GST updated: June 15, 2023 at 02:29 PM 2 mins read News

USDC/USDT price on Binance reaches a high, USDT lending rate surges on Aave.
Users exchange USDT for other stablecoins as it comprises 73.79% of Curve 3pool.
Czsamsun.eth borrows large USDT sums from Aave, transacts in USDC on 1inch.

The decentralized finance (DeFi) landscape is witnessing an intriguing shift as USDT dynamics fluctuate. With USDC/USDT prices reaching $1.0034 on Binance, a high since June 13, 2022, USDT lending rates on Aave have seen a significant spike. Concurrently, USDT has experienced a 0.3% decline, prompting users to exchange their USDT for other stablecoins.

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The price of the USDC/USDT trading pair on Binance continued to rise, and has currently reached $1.0034, a high since June 13, 2022. In fact, USDT fell by 0.3%.

USDT accounted for 73.79% of Curve 3pool, DAI accounted for 13.05%, and USDC accounted for 13.16%. Users exchange USDT… pic.twitter.com/heqrjsPuug
— Wu Blockchain (@WuBlockchain) June 15, 2023

USDT’s current market share in Curve 3pool stands at 73.79%, with DAI and USDC accounting for 13.05% and 13.16%, respectively. This shift in stablecoin preference is palpable in lending rates, as Aave V2 reports more than a 20% increase in the USDT deposit rate and a 30% surge in the loan rate. This uptick has led several large players to lend USDT on Aave and sell it on DEXs like Curve.

A prominent transaction involved czsamsun.eth, who borrowed a staggering 31.5 million USDT from Aave V2 using 17,000 ETH and 14,000 stETH as collateral. The borrowed USDT was exchanged for USDC on 1inch and later deposited into V2 and V3 in large sums. This move was soon followed by another borrower mortgaging a sizable stETH amount and borrowing 50 million USDC.

Responding to these market shifts, Paolo Ardoino, CTO of Tether, expressed confidence in Tether’s resilience and readiness to redeem any amount.

Markets are edgy in these days, so it's easy for attackers to capitalize on this general sentiment.
But at Tether we're ready as always. Let them come.
We're ready to redeem any amount.
— Paolo Ardoino 🍐 (@paoloardoino) June 15, 2023

This development underscores the dynamic nature of DeFi markets. It highlights the critical role of lending platforms like Aave and liquidity providers like Curve in responding to market fluctuations. With platforms continuously adapting to shifts and users leveraging opportunities, the DeFi sector demonstrates remarkable agility and vibrancy.

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