Original author: Thor Hartvigsen

Compiled by: Kxp, BlockBeats

Today, USDT accounts for more than 70% of Curve’s 3pool. This serious over-concentration has aroused great concern in the market.

Faced with this situation, I can't help but think, is this groundless panic or is it a large organization that has information that we don't know?

As a professional investor, I didn’t want to gamble on this, so I chose to short-hedge USDT on-chain, and here’s how I did it.

As a major stablecoin exchange platform, Curve’s protocol has the deepest liquidity. However, when Curve’s 3pool becomes imbalanced, it becomes difficult to conduct stablecoin exchanges and is susceptible to substantial slippage risk.

Currently, this is exactly the case as many people are selling USDT.

If you wish to convert USDT to other stablecoins, there are several options for you to consider, such as USDC, DAI, FRAX, or decentralized stablecoins like LUSD on mainnet or VST on Arbitrum. Additionally, you can easily short USDT on-chain:

  • Go to a currency market like Aave or Radiant Capital

  • Deposit lower volatility collateral such as USDC or other non-USDT stablecoins

  • Lending USDT using this collateral

  • Convert borrowed USDT to other stablecoins

  • (If necessary, you can also loop the operation for leveraged short positions)

  • If USDT depegs, you can repay the loan and make a profit.

It should be noted that on the Aave Ethereum mainnet, the cost of lending USDT is approximately 2% APY, but on Arbitrum it is 20%; while the cost of lending USDT on Radiant is 10%, but if you qualify for RDNT As a reward, you can lend it out for free.

Regarding whether USDT will be decoupled, I personally think not. However, since I had no way of knowing what was going on behind the scenes, I had to wait and see.

Given that I already had funds on Radiant, this short trade was free for me and therefore able to profit from it.

(The above content is excerpted and reprinted with the authorization of partner MarsBit, original text link | Source: BlockBeats)

Statement: The article only represents the author's personal views and opinions, and does not represent the objective views and positions of the blockchain. All contents and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and transactions, and the author and Blockchain Client will not be held responsible for any direct or indirect losses caused by investors' transactions.

This article follows the institution and how to "short USDT" on the chain to hedge market risks? First appeared in Block Guest.