Stablecoins, including Tether (USDT), have gained popularity over the years in the realm of digital assets. Stablecoins are often viewed as a reliable option as compared to fiat currency, especially for those interested in cryptocurrencies. Cryptocurrencies are known for their volatility. However, stablecoins are specifically designed to remain tethered to a particular currency, such as the U.S. dollar.
In case you had a decent holding of USDT and wanted to know how to earn passive income on that, we’ve got you covered. Before we dive deeper into how to stake USDT, let us understand what staking is.
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What is Staking?
Crypto staking is the technique of holding and locking cryptocurrency in a digital wallet in order to maintain the operations of a blockchain network. They contribute to the network’s security, consensus mechanism, and overall operation by doing so.
Staking is typically connected with proof-of-stake (PoS) blockchain systems, in which validators are chosen based on the amount of cryptocurrency they hold and commit to staking to create new blocks and validate transactions.
Staking provides cryptocurrency holders with an option to earn passive income on their holdings. Instead of resting their crypto assets in a wallet, users can stake them to make the assets work for them and earn free money.
Also read: How to Stake XRP?
USDT in a Nutshell
Launched in 2014, USDT is designed to maintain a stable value by pegging it to a fiat currency, usually the US dollar, at a 1:1 ratio. This ensures that the Tether price always remains at $1, despite the volatility. Tether also ensures that it backs the USDT tokens with dollar reserves. Traders and investors often use USDT as a stable store of value, as it aims to provide stability and minimize the price volatility associated with other cryptocurrencies.
It remains one of the most prominent and widely used stablecoins in the cryptocurrency ecosystem. According to CoinGecko, Tether is the largest stablecoin by market cap. The market capitalization of USDT currently stands at $82,235,267,271.
Also read: How to Stake BNB?
Can you Stake USDT?
USDT, technically speaking, does not support staking or staking rewards due to its consensus mechanism not being based on proof of stake. However, there are platforms such as Binance, KuCoin, and Atomic Wallet that offer flexible savings options for it. These platforms allow users to lend out their coins to others in exchange for interest or returns.
When participating in these lending programs, the custody of your coin is typically transferred to a third party, whether it be the platform itself or the borrowers. They may utilize the lent USDT to provide liquidity on their platform or lend it to individuals seeking to borrow it.
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How to Earn Interest on USDT?
Remember, earning interest on your coins makes it necessary to trust your coins with a third-party website. There are many different platforms and crypto exchanges that provide interest for your Tether coins. Let’s look at how you can stake USDT and other coins, and earn interest on Binance.
- Make sure you have a Binance account. If not, sign up for an account and complete verification.
- Once you are verified, buy Tether or deposit the amount of USDT that you want to lock away to earn interest.
- Go to Binance Earn and click on log in.
- Once that is done, click on “Simple Earn.”
- You will then be redirected to a page with different coins to choose from.
- Search for “USDT” and click on “Subscribe.”
- You will see a tab where you can enter the subscription amount. You can enter the amount of USDT that you like to stake.
- A real-time APR will pop up showing a live indication of rewards that you can receive. You can earn rewards depending on the APR.
- The interest rate at press time is 1.98% but can change from time to time.
- Once you enter the amount and read the summary, you can confirm the transaction.
That’s it. The rewards will be distributed to your earn wallet every minute. However, do proper research before trusting any website with your crypto.