Tether, the blockchain-enabled platform that powers the largest stablecoin by market capitalization, and Compound, a decentralized lending market, are spearheading growth in the nascent decentralized finance (DeFi) space as USDt volume on the platform has surged above US$100 million.

USDt has grown faster than all rival offerings on the Compound protocol, offering the most enticing yields on the platform. Some of the USDt investors indirectly interact with the Compound protocol, which focuses on establishing money markets that are a pool of assets with algorithmically derived interest rates. 

“Tether is an extremely useful asset in the Compound ecosystem, and has quickly become one of the most liquid markets in the Compound protocol and accordingly across all of DeFi,” said Calvin Liu, Strategy Lead at Compound. “USDt’s growth on Compound has been faster than the growth of any other asset in the protocol, by multiples.”

“Compound and its peers are driving a nascent alternative financial system that is disintermediating the need for banks and trusted, centralized third parties,” said Paolo Ardoino, CTO at Tether. “As the most liquid, stable and trusted stablecoin, we are gratified that Tether is playing such an important role in the Compound protocol. Tether is becoming the reserve currency of DeFi.”

USDt lenders yield more than 11% while borrowers are paying over 17%. USDt has US$104 million supply, US$77 million borrowing, representing 2,121 suppliers and 421 borrowers, according to data provided by Compound.

Compound’s COMP token, which began trading earlier this week on Uniswap, will support a protocol that aims to enable frictionless borrowing of Ethereum tokens, thereby facilitating a positive-yield approach for the process of storing assets. COMP tokens mark the protocol’s first steps towards decentralization, with token holders and their delegates able to “debate, propose, and vote on all changes to Compound.” 

“We introduced a token distribution that is essentially liquidity mining,”  added Liu. “Right now, users of the Tether market on Compound are earning an incredible amount of COMP token, which makes the effective yield positive for both supply and borrowing, and between 50-100% positive yield,” added Liu.

In addition to it’s Ethereum-based version of USDt, there are versions of USDt that work on Algorand, Ethereum, EOS, Liquid Network, Omni and Tron. Tether is driven to support and empower growing ventures and innovation in the blockchain space. USDt has grown to a market capitalization of US$9.8 billion, dwarfing the size of rival stablecoins by market capitalization, trading volume and number of users.