What Is Compound USDT (cUSDT) How It Works & Where To Buy It?

Compound USDT coin (cUSDT) is a token that is distributed to users that provide USDT to liquidity pools on the Compound protocol. The platform allows people to earn cUSDT for lending their USDT coins and also allows individuals to borrow USDT on the platform.

Currently 1 USDT = 45.71281483574876 cUSDT

Lending protocols like Compound have grown immensely in popularity recently. USDT is the 2nd most borrowed asset on the Compound platform.

How Compound USDT Coin (cUSDT) Works

Before we learn about how Compound USDT coin works -let’s quickly understand what Compound (COMP) is.

Essentially, Compound allows users to earn yields on tokens they lend to Compound pools. Lenders earn a specific APY % on tokens they lend to Compound pools – the current APY for lending USDT is 2.77%.

cUSDT tokens are distributed to USDT lenders – rewards are always distributed in the particular asset that is lent to the pool – for example, USDT lenders receive rewards in cUSDT tokens. The process is relatively simple – users have the choice of lending a variety of tokens to the Compound platform, and each token they supply has a differing APY% rate.

USDT is the largest stablecoin in the world by market cap, demand is high for the token, and lenders can earn generous yields.

What Is Compound USDT Coin (cUSDT) Used For?

The cUSDT pool incentivizes lenders who supply liquidity pools with USDT. Essentially, USDT lenders provide liquidity for USDT borrowers.

USDT pool rewards are paid in cUSDT tokens. Lenders can then trade these cUSDT tokens for other tokens available on the Compound platform.

Compound has quickly grown to become an incredibly popular lending protocol that is dominating in the crypto space. Innovative mechanisms ensure that the protocol has sufficient collateral and always has a higher supply than the demand for borrowing.

Pool funds are always divided into a collateral factor and a reserve factor. The reserve factor accounts for the USDT supply pool has a collateral factor of 0% and a reserve factor of 7%.

To date, there have been a total of 17,871,479,027 cUSDT minted. It should be noted that cUSDT tokens can only be traded on the Compound platform.

Where To Buy Compound USDT Coin (cUSDT)

cUSDT tokens are native to the Compound lending protocol. Currently, the lending protocol has 20 cryptocurrencies that can be supplied or borrowed.

There aren’t any centralized cryptocurrency exchanges that list cUSDT coins – the tokens are only available directly from the Compound App.

Any individuals that want to participate in lending protocols need to do sufficient research on the protocol, the team of founders and developers, and any other important information.

About Compound USDT Coin (cUSDT)

How long has Compound USDT Coin (cUSDT) existed?

Robert Leshner and Geoffrey Hayes initially found the Compound protocol in 2018. Both founders are extensively experienced and have worked at Britches, a company that facilitated the aggregation of inventory from local shops, later to be sold on PostMates.

cUSDT was added to the Compound platform because there’s an incredibly high demand for USDT. The compound USDT coin has remained relatively stable in value compared to USDT; this has encouraged lenders to keep participating on the platform.

The current number of USDT supplied to the platform stands around $390 million, making it the 5th most supplied asset on the platform.

What’s controversial about Compound USDT Coin (cUSDT)?

Compound has quickly become one of the most used and most trusted lending protocols. However, before investing in any platform or digital asset, it’s crucial to research the project, its history, founders, as well as other important information.

And like other projects, Compound has already had its share of controversy. Let’s take a look at the top two controversies surrounding Compound USDT Coin (cUSDT).

• Recent Governance Attack –  The Compound governance token allows users to obtain voting rights, and holders can also submit governance proposals. Users receive voting rights proportionate to their COMP allocation.
• COMP tokens become increasingly valuable compared to other platforms as the protocol grows. One of the most concerning events to occur was when TRON’s founder, Justin Sun, was accused of intending to sway an important governance vote.
  Sun borrowed more than 90k COMP right before one of the most important protocol votes. COMP is a pure governance asset and isn’t an underlying asset that is lent to the protocol, this is what makes it especially risky to try to maintain lending protocol governance.
• Lenders vs. Borrowers – Logically, there needs to be enough liquidity to meet the demand for borrowing. This ensures an equilibrium is maintained and that all parties involved can participate with ease. However, the demand for borrowing is incredibly low on the Compound platform. There’s a definite surplus of users that lend assets, and the interest accrued on these assets adds up quickly.
• The significant shortage in borrowing activity might indicate a lack of trust, or it may indicate that there is no interest from the market yet.

How many Compound USDT Coin (cUSDT) tokens are there?

At the time of writing, cUSDT’s circulating supply is currently unavailable.

The total supply of Compound USD Coin (CUSDC), according to Coinmarketcap.com, is 4,558,972,537.

The current Compound USDT price is $0.02185.

The current price fluctuates in the same manner as most cryptocurrencies, according to the relative supply and demand.

Can Compound USDT Coin (cUSDT) be mined?

Compound USDT Coin (cUSDT) is not a mineable cryptocurrency. cUSDT tokens are distributed to individuals who lend USDT to the Compound platform.

These individuals then earn cUSDT rewards for lending USDT to the platform. The current APY % is around 2.77%.

What is the market cap of Compound USDT Coin (cUSDT)?

The market cap of any cryptocurrency can be calculated by using the same formula: total amount of coins in circulation times the current market price.

Compound USDT Coin (cUSDT) Market Cap = currently unavailable due to credible data; the circulating supply of cUSDT is not uniformly documented across multiple data sites.

The market cap is always fluctuating according to circulating supply and market price.

Biggest Competitors Of Compound And Compound USDT Coin (cUSDT)

The decentralized lending protocol has quickly amassed a large number of global users because it caters to the needs of a large portion of the crypto market. It also meets these needs in an unbiased and non-discriminatory way. USDT lenders receive cUSDT tokens, and at the cUSDT price, lenders can earn generous yields from supplying Compound pools with USDT tokens.

Coinbase and A16Z are some of the biggest partners of the Compound platform. An even more extensive list of the platform’s partners can be found here.

The biggest competitors of Compound currently are:

• Maker
• AAVE

What Are The Future Plans For Compound And Compound USDT Coin?

Compound is actively working on providing lenders and borrowers with a secure and enjoyable experience. The platform currently has 20 assets available on the Compound market and is looking to increase this number soon.

Including more assets for lending and borrowing will make the platform more appealing to users, and will likely result in bolstered user adoption and revenue generation.

Pros And Cons Of Compound And cUSDT

Pros:

• Rewards mechanism – Lenders supply USDT pools in because they receive cUSDT tokens as a reward. All ctokens accumulate interest, and there are several assets that users can supply or borrow from the Compound platform.
• Among The Largest Lending Protocols – The Compound platform is one of the top lending protocols. Most individuals consider it to be a trustworthy and credible platform. This puts the platform in an advantageous position because many lending protocols are deemed to be risky and are seen as opaque.
• Great User Experience – Blockchain platforms are typically complex, and the average person struggles to navigate them. Compound’s platform is simple and easy to navigate; this has played a large part in its success. DeFi adoption is reliant on platforms that simplify complex concepts.
• Sufficient Liquidity – Compound, unlike many other protocols, has a surplus of liquidity. Any lending protocol is required to have a sufficient amount of liquidity to meet the demands of borrowers but many fail to do so. Most individuals see the platform as a trustworthy protocol because it is capable of meeting the borrowing demands of users.

Cons:

• COMP Governance Token – COMP token holders are given unique and exclusive voting rights that they can exercise when proposals arise. However, a unique risk associated with lending protocols is the ability for users to borrow a large amount of the protocols governance token. For example, COMP token holders that have a significantly large portion of COMP tokens could potentially sway a governance vote. This would be considered ‘bad acting’ and would reflect bias in the vote.
• This system is especially risky because the amount of COMP tokens held by a user determines the weighting of their voting power.
• Low-interest rates / APY –  USDT lenders receive a relatively low APY of only 2.77%. Although supplying a stablecoin such as USDT to a Compound pool is a relatively risk-free investment, the rewards are still lower than other decentralized platforms. Many users would rather stake their USDT on a centralized exchange that gives them a higher return on their tokens.