What is wstUSDT?
TechFlow Selected TechFlow Selected
What is wstUSDT?
Holding wstUSDT earns the same staking rewards as holding stUSDT.
Navigating Web3 tides with focused insightsOn July 17, 2023, Huobi listed wstUSDT, a concept token from the RWA sector. What is wstUSDT, and how can you obtain it and earn returns from it?
What Is stUSDT?
Before understanding wstUSDT, it's essential to first understand what stUSDT is. stUSDT is an RWA (Real-World Assets) token issued when users stake USDT on the official website stusdt.io. stUSDT can be converted back and forth with USDT at a 1:1 ratio and has the same functionality as other TRC20 tokens. Currently, stUSDT primarily invests in low-risk debt products.
What Is wstUSDT?
wstUSDT (Wrapped stUSDT) is a TRC-20 token obtained by depositing stUSDT into a Wrapper contract. Holding wstUSDT earns the same staking yield as holding stUSDT directly. However, the staking rewards do not increase your wstUSDT balance; instead, they are reflected in the price of wstUSDT.
Why Generate wstUSDT?
Essentially, ignoring market price fluctuations, the interest earnings from holding either stUSDT or wstUSDT are fixed in value.
To make it easier for investors to trade real-world asset receipts like stUSDT on exchanges, stUSDT is wrapped into the TRC-20 token wstUSDT. Representing interest income through price changes is also more convenient than frequently settling stUSDT balances.
How to Understand wstUSDT Price Movements?
Suppose you stake 100 USDT on-chain and receive 100 stUSDT, earning 5 stUSDT in interest annually. After one year, you hold 105 stUSDT, equivalent in value to 105 USDT.
If instead, you exchange 100 USDT for 100 wstUSDT on Huobi and hold it for a year, you still hold 100 wstUSDT, but the price of wstUSDT rises to 1.05 (under a 5% annualized return from debt products), making your 100 wstUSDT worth 105 USDT.
In other words, while wstUSDT was initially exchangeable 1:1 with USDT, after one year, due to accrued interest, its price increases to 1.05 USDT. The interest earned from holding wstUSDT is not reflected in quantity but in price, which continuously rises as interest accumulates.
Whether you stake USDT on-chain to hold stUSDT or hold wstUSDT within the Huobi platform, theoretically, both methods yield the same value appreciation and income over time.
How to Earn Returns from RWA Debt Products?
Exchange: Directly purchase wstUSDT on Huobi and benefit from price appreciation.
On-chain: Use stusdt.io to stake USDT and receive stUSDT, earning yield as it appreciates.
What Are the Opportunities and Risks of Trading wstUSDT?
The price of wstUSDT consists of principal and interest. Under normal conditions, the price of wstUSDT remains highly stable. If wstUSDT trades below its fair value, buying it directly yields more profit than converting stUSDT. Conversely, if wstUSDT trades above its fair value based on accrued interest, selling it allows you to capture premium gains beyond just interest income.
On the risk side, if the market price of wstUSDT falls below its fair value, interest income may be erased, and even principal losses could occur. If wstUSDT trades above fair value, purchasing it on the market incurs higher transaction costs. In traditional finance terms, trading wstUSDT can be通俗理解 understood as trading fixed-income bonds.
That concludes our introduction to wstUSDT—head over to Huobi to start trading!
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
