- Tether's Revenue Sources
- Competition with Other Stablecoins
- Ethereum-Based Stablecoins
Tether (USDT) has shown record revenue results in recent months, becoming the leading stablecoin.
Tether's Revenue Sources
Tether generates more than $93 million in weekly fees, with up to $13.4 million on the most active days. The primary source of revenue is the interest rate from US Treasury Bills. In a press release for the second quarter of 2024, Tether became the third-largest buyer of three-month US Treasury bills. As of the end of June, Tether Inc. holds $97.6 billion in US government debt, making them the 18th largest holder of US treasuries.
Competition with Other Stablecoins
Some other asset-backed stablecoins also have built-in revenue-sharing mechanisms, which may make them riskier. According to the report for the first half of 2024, Tether Inc. earned $5.2 billion in profits, some of which may be directed back into buying US Treasury Bills. This suggests that the company's reserves could increase, allowing them to issue more stablecoins.
Ethereum-Based Stablecoins
Ethereum-based stablecoins, such as USDT, are used in various protocols, including Aave, which has become the protocol with the highest stablecoin usage. Ethereum has significantly increased its presence in this segment, adding more than 15 billion USDT since the last quarter of 2023. Stablecoins are also redistributed to platforms like Arbitrum and Optimism, which were previously considered systemic risks but are now used to support other DeFi protocols due to their changed reserve structures.
Tether continues to set revenue records due to USDT's popularity and solid reserve management. While other stablecoins strive to keep up, Tether maintains its leadership thanks to its stable investment strategy.
