DeFi Protocol Compound Allows Users to Lend, Borrow Tether

DeFi Protocol Compound Allows Users to Lend, Borrow Tether

Users of DeFi lending solution Compound can lend and borrow Tether (USDT), following a recent survey by Compound’s governance token holders.

Almost 797,981.28 participants in the survey supported the idea of adding the stablecoin, compared with only 85,580.73 who rejected the idea, Crowd Fund Insider website reported.

The biggest number of votes was allegedly given by Geoffery Hayes, founder and CTO of Compound, to add the stablecoin as a borrowing option.

This is undoubtedly the very first idea that the new governance mechanism of Compound has processed. In 2019, developers of the DeFi protocol have allowed a community vote option to evaluate user’s interest in backing new crypto assets on the protocol. The most votes were given to Maker (MKR) and USDT.

Although the protocol’s users have the option of offering and receiving loans in USDT, as explained in the proposal, the leading stablecoin cannot be used as collateral.

The most commonly used assets in the DeFi ecosystem are USDC stablecoins, Loanscan data indicates. However, the USDT remains the most liquid coin on the crypto market, dominating over 78 percent of the overall market share.

According to its official website, Compound is “an Ethereum-based algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications.”

How Tether works?

Tether or Digital Dollar belongs to secured digital stablecoins, hence comes the protection against digital currency fluctuations, using the Blockchain network.

Tether is used as a means of exchange and at the same time a way value keeping, rather than as a method of bargain. The Tether or Digital Dollar can be converted into a regular currency such as the Dollar, Euro, or any other FIAT currency.

At the same time, it can be used in some restaurants or institutions that support these currencies.

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Rabea Maguid 551 Articles
Rabea Maguid is a journalist completely obsessed with crypto industry. He holds B.A. from Al-Azhar University, and has a background in journalism and economics. Rabea Maguid likes to think about the future in a positive way, and sees blockchain as a potential driver of deep societal change.