USD0 and USDT of $USUAL , both are stablecoins, but they play differently!
The USDT folks use the US dollar as a backing to print USDT for everyone to use.
They deposit money in banks or buy government bonds, making a little interest for themselves. Simply put, they use your US dollars to make money, and they keep all the profits.
On the other hand, USD0 plays at a more advanced level. They also use collateral, but the collateral is government bonds.
For example, if everyone exchanges 10 billion US dollars worth of government bonds for USD0, USD0 takes that 10 billion to buy government bonds. After a year, the bonds mature and become 11 billion, and they continue to buy new bonds, like a snowball effect.
The extra 1 billion interest is USD0's additional earnings, of which 90% is distributed to users!
Moreover, the staking rewards of USD0 are not limited to this. Every time someone exchanges USD0 or USDC, they have to pay a small fee, and this money also goes into USD0's pocket.
Plus, the money earned when USD0 issues more tokens adds to the profits.
In simple terms, USDT just uses your US dollars to make a little money and keeps it all for themselves, while USD0 uses government bonds as collateral, is willing to share the profits with users, and is more reliable.
Also, USD0 is a collateralized stablecoin, which is different from those algorithmically generated stablecoins.
