Analyst Insight

By assessing the on-chain metrics for USDT on Compound V3, our risk model classifies this as a conservative capital preservation play. While yields are moderate, the high safety score (82/100) prioritises principal protection.

The current APY of 2.86% is supported by a Total Value Locked (TVL) of $22,956,173. This pool is currently trading 9.8% below the category average. This yield compression often occurs in highly saturated, safer pools where capital seeks safety over returns.

Risk Context: With a Safety Score of 82/100, this liquidity pool is positioned for long-term holders seeking compound growth.

Yield Mechanics: How It Works

Understanding the underlying protocol logic is vital for assessing sustainability. The 2.86% APY displayed for USDT is primarily derived from interest paid by borrowers on the Compound V3 protocol.

Supply & Demand

When you deposit USDT, you become a liquidity provider. Borrowers pledge collateral (like ETH or BTC) to take out loans. The interest rate fluctuates based on the Utilisation Rate (currently 71.53%). With moderate utilisation, rates remain stable, ensuring liquidity is available for withdrawals.

Risk Strategy & Management

While Compound V3 is a reputable protocol, no yield is without risk. Based on the current Safety Score of 82/100, the following approac may suit (DYOR):

• Smart Contract Risk: Ensure you are comfortable with the audit history of Compound V3.
• Liquidity Risk: With a TVL of $22,956,173, slippage is minimal for standard trade sizes.
• Strategy: More suitable for a 'Set and Forget' strategy.

Frequently Asked Questions

Advanced Tools

Enhance your stablecoin yield data analysis with our suite of tools:

• Profit Calculator: Forecast compound interest earnings.
• Safety Audit: Deep dive into the risk factors.
• Liquidity Depth: Analyse market dominance and slippage.