<p>Are you looking to stake your USDT and earn a yield? Staking can be a popular way for investors to earn rewards, but is a function only available via <a href="/assets/proof-of-stake">proof-of-stake networks</a>.</p><p>&nbsp;</p><h2>How to stake Tether USDT</h2><p>Tether is not a proof-of-stake blockchain, so its native token USDT cannot be staked. However, you can still earn rewards by lending USDT on a centralized exchange or lending platform.&nbsp;</p><p>Before we dive deeper on how to lend your USDT, let’s take a brief look at why Tether USDT cannot be staked.</p><p>&nbsp;</p><h2>Why Can’t I Stake Tether USDT?</h2><p>USDT is a stablecoin and is not eligible for staking, since it has no underlying proof-of-stake blockchain.</p><p>Stablecoins represent the value of a reserve asset on a blockchain. The USDT stablecoin is pegged to the value of the US Dollar, with 1 USDT representing the value of 1 USD Dollar.&nbsp;</p><p>Stablecoins can be used as a safe haven and a hedge against the volatility of crypto assets in a portfolio. They are also commonly used for cross-border remittances, participation in DeFi and for lending.</p><p>As the world's most widely used stablecoin, USDT can be utilized across popular Proof-of-Stake blockchains such as <a href="/asset/ethereum-2-0">Ethereum</a>, <a href="/asset/solana">Solana</a>, <a href="/asset/cardano">Cardano</a> and <a href="/asset/avalanche">Avalanche</a>.</p><p>If you are looking to earn passive income from your USDT, then you may choose to lend USDT on a centralized exchange or lending platform. It is important to remember that the mechanic of lending is very different to staking.</p><p>&nbsp;</p><h2>The Difference Between Tether USDT Staking and Tether USDT Lending</h2><p>Staking is when you put your assets into a proof-of-stake blockchain to help validate transactions and secure the network. In return, you earn rewards in the form of the native token over time.</p><p>Staking is only possible on proof-of-stake blockchains such as <a href="/asset/ethereum-2-0">Ethereum</a>, <a href="/asset/solana">Solana</a> or <a href="/asset/cardano">Cardano</a>.</p><p>While USDT holders cannot “stake” their assets, they can still earn an interest by “lending” their holdings. Lending is very different from staking, as you are not contributing to the security of the PoS network, you are instead giving a loan of your crypto assets.</p><p>&nbsp;</p><h2>Where Can I Earn Rewards on Tether USDT?</h2><p>There are several ways to earn a return on your USDT, including lending them out to custodial providers or via a DeFi lending protocol.</p><p><strong>Distinguish between Custodial and Non-Custodial Lending:&nbsp;</strong></p><ul><li>Custodial lending refers to lending your crypto through a centralized entity such as <a href="https://www.binance.com/en/loan">Binance</a>, Kraken, Coinbase.</li><li>Non-custodial lending means that you have sole control of your private keys, and therefore control and custody of your own assets.</li></ul><p><strong>Do not fall for high APR %: </strong>When you lend your crypto, you will usually be quoted an APR for your investment. Some lending platforms may offer very high APRs as a way to attract investors, but these high APRs may be unrealistic and involve additional risk Safe USDT lending typically offers yields of around 2-3%.</p><p><strong>Stick to well-known DeFi protocols:</strong> Look for protocols that have liquid markets and choose protocols that have been audited by reputable auditors for added security.</p><p>&nbsp;</p><h2>How is USDT Yield Generated via Lending?</h2><p>On lending platforms, USDT token holders can contribute their USDT to liquidity pools, which can then be accessed by borrowers who provide collateral assets. These borrowers take out loans by borrowing against the collateral assets they have deposited. In exchange for the loan, borrowers pay an annual percentage rate (APR) to the token holders (i.e. lenders) who have added their USDT to the liquidity pools.</p><p>&nbsp;</p><h2>What are the risks of lending USDT?</h2><p>By lending USDT, the user custody of your assets is typically transferred to a third party, whether it be the platform itself or the borrowers. This itself presents a counterparty risk, as you will no longer be a custodian of your assets and you are relying on the other party to fulfill their obligations and default on the contract.</p><p>There are also Protocol security risks: There is a risk of unknown bugs in the Tether protocol and the USDT investment in general.</p><p>Keep in mind that this is not a comprehensive list of all potential risks associated with lending.</p><p>&nbsp;</p><h2>Where to store USDT?</h2><p>Looking for a crypto wallet? <a href="https://onelink.to/exodus-stakingreward">Exodus Wallet</a> has an intuitive interface, a built-in exchange feature and supports over 200+ assets. Manage your cryptocurrency portfolio securely and with ease using Exodus Wallet! Visit their website to <a href="https://onelink.to/exodus-stakingreward">learn more and download today</a>.</p>

Everything You Need to Know About Tether USDT Staking

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