common-close-0
BYDFi
Trade wherever you are!

What are the risks of tether lending its own coins?

avatarNikita KhrushchevDec 27, 2021 · 3 years ago3 answers

What are the potential risks and dangers associated with Tether lending its own coins?

What are the risks of tether lending its own coins?

3 answers

  • avatarDec 27, 2021 · 3 years ago
    Lending its own coins can expose Tether to counterparty risk, as the loans may not be repaid. This could lead to a loss of value for Tether holders.
  • avatarDec 27, 2021 · 3 years ago
    There is also the risk of Tether becoming overexposed to a particular asset or market segment if it lends a significant amount of its coins to a single borrower or group of borrowers.
  • avatarDec 27, 2021 · 3 years ago
    From BYDFi's perspective, lending its own coins can be a way to generate additional revenue by earning interest on the loans. However, it should be done cautiously to mitigate the risks involved.