DEXORINStablecoin USDT
Learn how stablecoins are priced, used and evaluated for risk.
What is a stablecoin?
A stablecoin is a digital asset designed to maintain a relatively stable price, usually by referencing a fiat currency or reserve asset. USDT is a widely used US dollar stablecoin that helps users price and settle digital-asset transactions.
- Its target is generally for 1 USDT to remain close to 1 US dollar
- It can support trading, transfers and value conversion
How USDT aims to stay stable
Stablecoin issuers use reserve assets together with issuance and redemption mechanisms to support the peg. Market trading and redemption may help prices return toward the target, but a peg does not mean an unconditional guarantee of equal value.
- Reserve transparency and redemption capacity are important considerations
- Market liquidity can affect short-term price deviations
Common use cases
On trading platforms, USDT is often used to purchase other digital assets, measure account value and move funds between products. Before a transfer, always verify the asset, network and recipient address.
- Check the trading pair and amount unit before placing an order
- Both sides of a deposit or withdrawal must use the same network
Risks to understand first
Stablecoins may still face depegging, liquidity, issuer credit, custody and regulatory risks. On-chain transactions are generally irreversible, and using the wrong network or address can result in permanent loss.
- Price stability should not be confused with an absence of risk
- Consider a small test transfer before sending a larger amount