DeFiChain Tether USD

dUSDT

dUSDT is a wrapped version of USDT that is compatible with the DeFiChain ecosystem. Every dUSDT is backed by 1 USDT locked on DeFiChain.

Risk Rating
Good
Summary
What we like
Provides easy on-ramp and off-ramp to convert your USDT into a DeFiChain-compatible version that is backed 1:1 by underlying reserves.
What we like less
dUSDT is backed by underlying USDT reserves that are held in custody with Cake DeFi (through BitGo) in addition to USD reserves (custodied by Tether), which increases centralization risks.
What it means for you
dUSDT is a non-volatile instrument to hedge your portfolio and also an easy way to put USD to work for you across DeFiChain.
Information
Blockchain
  • DeFiChain
Info
  • Asset Type: DST
Key Metrics
Risk Assessment
Good
Asset Strength

dUSDT is a low-cap, fully collateralized asset. This asset depends on two centralized entities for custody services. This asset is exposed to the underlying risks of DeFiChain DEX, a protocol rated as Watch out.

dUSDT is a stablecoin that consistently trades within 10bps of its peg to USD, which makes it a great store of value.

Asset Tokenomics

dUSDT has an uncapped supply but has inflation control or burn mechanisms in place.

Asset Volatility

dUSDT is a stablecoin that consistently trades within 10bps of its peg to , which makes it a great store of value.

Dependencies

DeFiChain DEX

Things to know about dUSDT

Who invented USDT?

USDT launched on the Ethereum mainnet in July 2014 by Brock Pierce, Craig Sellars and Reeve Collins. Tether is one of the earliest stablecoins created that pioneered the fiat-collaterlization model that is widely used today. Tether based out of Hong Kong is the sole entity responsible for creating and redeeming tokens as well as maintaining the 1:1 reserve backing.

How does dUSDT work?

dUSDT is exposed to two centralized entities. It is backed 1:1 by USDT reserves held with Cake DeFi (via BitGo). USDT is also backed 1:1 by USD reserves held with a licensed custodian (Tether). The process of minting USDT tokens requires a KYC registration process with Tether. After receiving approval from Tether's compliance team, the user sends USD to Tether's bank account. Tether then uses the USDT smart contract to mint an equivalent amount of USDT. Lastly, the newly created USDT are sent to the user's on-chain address, while the deposited USD are held in reserve. The process for redeeming USDT back into USD is the same process but reversed.

How secure is dUSDT?

dUSDT is as secure as the risk management policies of Cake DeFi and BitGo. USDT is a centralized stablecoin that relies on a proof-of-reserve system to ensure its reserve assets match its circulating supply. However, the token has faced significant controversy since its inception due to its failure to provide audited reserve attestations by an independent auditor and its reserve reports does not specify the exact underlying assets. The reserve composition of USDT is considered riskier as it consists not only of cash and cash equivalents but also other assets and receivables from loans made by Tether to third parties. Further, USDT has the ability to "blacklist" any of its associated addresses at will. When a USDT address is blacklisted, it can no longer receive USDT and all of the USDT controlled by the address can no longer be trasnferred on-chain.

dUSDT Pools
DeFiChain USD Market Making
26.1%
Yield
$1M
TVL
Risk
F
Chain
DeFiChain
DeFiChain DFI-USD Market Making
25.5%
Yield
$771K
TVL
Risk
F
Chain
DeFiChain