Aave, one of the biggest lending protocols in the Open Finance ecosystem has added support for the USDT stablecoin.
The company announced on Tuesday a collaboration with DeFi lending protocol Aave, which allows Aave users to lend and borrow USDT. As Aave's website shows, $3.67 million worth of USDT have already been lent out, making USDT the most borrowed token on the lending platform already. Aave is listed sixth on DeFi Pulse in terms of total locked value, coming in at $25.2 million, and the fourth largest in terms of locked value among DeFi lenders.
Previously, USDT users could already lend the stablecoin via some DeFi platforms, according to Tether public relations manager Joe Morgan. However, this is the first time that USDT is used for on-chain lending and borrowing, and the collaboration is "indicative of USDt’s pivotal role in the wider DeFi ecosystem," Morgan stated.
The ambition here, according to Tether CTO Paolo Ardoino, is to make Tether "the de-facto most used stablecoin among major DeFi projects."
"DeFi is one of the biggest growing markets and it's still at its beginnings. It is important for Tether to lead that growth," Ardoino told The Block.
Tether is not the only stablecoin issuer that has its eye on DeFi. The space is currently dominated by stablecoin DAI, which accounts for around 50% of the total originated loans.
In September last year, Coinbase, which is a member of the consortium that issues stablecoin USDC, also deposited $2 million worth of USDC to lending protocol Compound and exchange dYdX.
Yet among the issuers focused in the DeFi space, Tether has come under intense scrutiny by regulators in the U.S. iFinex, the parent company of cryptocurrency exchange Bitfinex and Tether, has been locked in a prolonged legal fight with the New York Attorney General. Tether has also been accused of market manipulation, a charge that the firm has denied as meritless.