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0xMoon
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Binance Wallet sUSDD can achieve Circular Lending with 45% APY
Today I saw a tweet from the official USDD account, stating that the lending market for sUSDD/USDT has launched on Morpho. My first reaction was, isn't that invincible? Because this means that circular lending is possible.
Because depositing USDD into the official protocol yields sUSDD, and sUSDD does not need to be kept in a wallet to earn interest, it means that sUSDD can be deposited again to borrow USDT on Morpho, and USDT can again be exchanged for USDD at a 1:1 ratio without any loss, obtaining sUSDD again and again, compounding interest. This is circular lending.
Quickly, I went to check, and the current interest rate for depositing USDD in the Binance wallet activity is 10.4%. This includes an 8% fixed interest rate and a 2.4% reward interest rate, which is quite substantial.
Because depositing USDD into the official protocol yields sUSDD, and sUSDD does not need to be kept in a wallet to earn interest, it means that sUSDD can be deposited again to borrow USDT on Morpho, and USDT can again be exchanged for USDD at a 1:1 ratio without any loss, obtaining sUSDD again and again, compounding interest. This is circular lending.
Quickly, I went to check, and the current interest rate for depositing USDD in the Binance wallet activity is 10.4%. This includes an 8% fixed interest rate and a 2.4% reward interest rate, which is quite substantial.
