Stablecoin lending: where the yield comes from

1. The question

You deposit USDT into a savings account on bitexasia and get 6.2% APY. Where does 6.2% come from? Why is it 6.2 and not 4 or 12? Why does it change?

This piece walks through the actual chain — every party, every payment.

2. Supply side: customers like you

You and ~180,000 other customers deposit USDT into the savings pool. Total pool: $2.10B. The pool is a single fungible balance (an ERC-20 receipt token represents your share). You're not lending to one specific borrower; you're a fractional owner of the pool's total claim on borrowers.

3. Demand side: who's borrowing

Three groups borrow USDT from the pool:

• Margin traders (75% of borrow demand). Use USDT to size up positions. Pay borrow APY in real time, deducted hourly.
• Market makers (20% of borrow). Need USDT inventory to quote on the order book. Pay institutional-tier rates negotiated quarterly.
• OTC desk (5% of borrow). Bridges USDT for large block trades that would otherwise move the public book.

Total currently borrowed: $1.65B. Utilisation = 1.65 / 2.10 = 78.6%.

4. How the rate is set

Two-piece linear curve:

• Below 80% utilisation: borrow APY scales linearly from 1% (at 0%) to 8% (at 80%).
• Above 80%: a "kink" — borrow APY jumps to 25% at 95% utilisation, to discourage hitting 100% utilisation (which would freeze withdrawals).

At 78.6% utilisation, borrow APY = 7.85%. Supply APY = borrow APY × utilisation × (1 − reserve factor). Reserve factor = 0.05. So supply APY = 7.85% × 78.6% × 95% = 5.86%.

Rounded and reported on the savings page as 6.2% (the small upward bump from the headline number is platform-level promotional sweetener; we cap it at 35 bps).

5. Where the money actually goes

Per $1 of interest paid by a borrower:

• $0.95 → savings depositors (you).
• $0.05 → reserve factor. This pool builds up to absorb bad debt if a borrower's collateral becomes insufficient. Currently ~$48M, growing.
• $0 → bitexasia direct revenue. We make our money on trading fees, not on the lending spread.

6. Why your rate changes

Two things move the rate:

• Utilisation changes. Margin-trading demand surges in volatile markets; rates climb. Demand softens in quiet markets; rates fall. This is most of the day-to-day variation.
• Curve adjustments. Quarterly review — we look at competitor rates, default-rate trends, regulatory considerations. Adjust the kink point or slope. Last adjustment: 2025-Q4 (kink moved from 75% to 80% to encourage higher safe utilisation).

7. What can go wrong

Borrowers are over-collateralised — they post 130–150% of borrowed value as collateral, and the liquidation engine forces them to post more or unwind if their collateral falls below maintenance. So in nearly all cases, the pool is fully covered.

The bad case is a sudden 30%+ market crash where multiple positions liquidate simultaneously and the engine can't unwind cleanly. Reserve factor + insurance fund cover this. We've stress-tested to 50% drops; the 2026-Q1 stress report is in the audit archive.