What Stablecoins Can I Borrow on Sats Terminal?

What Stablecoins Can I Borrow on Sats Terminal?

Borrow by Sats Terminal allows you to borrow stablecoins against your Bitcoin. The primary stablecoin available is USDC (USD Coin), with USDT (Tether) available on select chains and protocols. This article covers everything you need to know about the stablecoins offered on Borrow, how they differ, and how to choose the right one for your needs.

Supported Stablecoins

USDC (USD Coin)

USDC is the most widely available stablecoin on Borrow and serves as the default option across most lending offers. It is a dollar-pegged stablecoin issued by Circle, a regulated financial technology company. Key characteristics of USDC include:

• 1:1 dollar backing -- every USDC token is backed by US dollar reserves held in regulated financial institutions
• Monthly attestations -- Circle publishes regular attestation reports from independent accounting firms verifying its reserves
• Regulatory compliance -- USDC is issued under a framework designed to comply with US money transmission regulations
• Wide DeFi adoption -- USDC is accepted across virtually every DeFi protocol, exchange, and blockchain

On Borrow, USDC is available across all supported chains and lending protocols. Whether you are borrowing through an Ethereum-based protocol, a BNB Chain protocol, or a protocol on Base, USDC will typically be an available option.

USDT (Tether)

USDT is the original stablecoin and remains the most traded stablecoin by market volume globally. It is issued by Tether Limited. Key characteristics include:

• Dollar-pegged -- designed to maintain a value of $1 per token
• Highest liquidity -- USDT has the deepest trading liquidity of any stablecoin across centralized and decentralized exchanges
• Long track record -- launched in 2014, USDT has the longest operating history of any stablecoin
• Broad exchange support -- virtually every cryptocurrency exchange supports USDT trading pairs

On Borrow, USDT is available on selected chains and protocols. Not every lending protocol supports USDT, so availability depends on the specific offer you select. When USDT is available, it appears as a separate lending offer alongside USDC offers.

How to Choose Between USDC and USDT

Both stablecoins serve the same fundamental purpose: providing you with dollar-denominated liquidity against your Bitcoin collateral. However, there are reasons you might prefer one over the other.

Choose USDC If:

• You prioritize transparency -- Circle's regular reserve attestations provide clear visibility into USDC's backing
• You want maximum availability -- USDC is available across all Borrow lending offers
• You plan to use DeFi -- USDC is deeply integrated across DeFi protocols for swapping, providing liquidity, or earning yield
• You value regulatory clarity -- USDC's issuer operates under a well-defined regulatory framework

Choose USDT If:

• You need exchange liquidity -- USDT has the deepest trading pairs on centralized exchanges, making it easier to convert to other assets or fiat
• You are sending to an exchange -- many traders prefer USDT for its ubiquitous exchange presence
• You want the stablecoin with the longest track record -- USDT has operated since 2014 with consistent dollar peg maintenance
• A USDT offer has better rates -- sometimes USDT lending offers may have more favorable interest rates depending on protocol conditions

When It Does Not Matter

For many users, the choice between USDC and USDT is inconsequential. If you plan to:

• Hold the stablecoins temporarily and repay your loan
• Send the stablecoins to an exchange that supports both
• Use the stablecoins for a one-time purchase or payment

Then either option works equally well. In these cases, simply choose the offer with the best interest rate or most favorable terms, regardless of which stablecoin it involves.

Understanding Stablecoin Mechanics

What Makes a Stablecoin "Stable"?

Stablecoins maintain their dollar peg through a combination of mechanisms:

1. Reserve backing -- each token is backed by reserves held in bank accounts, treasuries, or other assets
2. Redemption mechanism -- authorized entities can redeem stablecoins for the underlying dollars, creating arbitrage incentives that keep the price at $1
3. Market confidence -- widespread trust and adoption create consistent demand

Both USDC and USDT are "fiat-backed" stablecoins, meaning they are backed by real-world dollar reserves rather than by algorithmic mechanisms or cryptocurrency collateral.

Stablecoins on Different Blockchains

A common point of confusion for newcomers is that the same stablecoin (e.g., USDC) can exist on multiple blockchains. The USDC you borrow on Ethereum is the same dollar value as USDC on BNB Chain or Base, but they are technically different tokens on different networks.

When you borrow stablecoins through Borrow, you receive them on the blockchain where the lending protocol operates. For example:

• Borrowing through an Ethereum-based protocol delivers USDC on Ethereum (ERC-20 USDC)
• Borrowing through a BNB Chain protocol delivers USDC on BNB Chain (BEP-20 USDC)
• Borrowing through a Base protocol delivers USDC on Base

The stablecoins arrive in your self-custodial Privy wallet, which supports the relevant blockchain. From there, you can transfer, bridge, or use them as you see fit.

How Stablecoin Borrowing Works on Borrow

The Lending Offer

When you browse offers on Borrow, each listing shows:

• The stablecoin being offered (USDC or USDT)
• The lending protocol providing the offer
• The blockchain the protocol operates on
• The interest rate (annual percentage rate for borrowing)
• The LTV ratio (how much you can borrow relative to your collateral value)

You compare these offers to find the best combination of stablecoin, rate, and terms for your situation.

Receiving Your Stablecoins

After you deposit BTC and the automatic collateral preparation completes, the lending protocol releases your borrowed stablecoins. These are sent directly to your self-custodial Privy wallet.

The process is fully automated. You do not need to claim, withdraw, or manually interact with the protocol to receive your stablecoins. They simply appear in your wallet once the borrowing transaction confirms on-chain.

Using Your Stablecoins

Once stablecoins are in your wallet, you have complete control. Common uses include:

• Holding -- maintaining a dollar-denominated position while keeping BTC exposure through your collateral
• Spending -- using stablecoins for purchases, payments, or services
• Trading -- sending stablecoins to an exchange to trade other assets
• DeFi -- using stablecoins in other DeFi protocols for yield or liquidity
• Transferring -- sending stablecoins to another wallet or recipient

Because your wallet is self-custodial, Borrow cannot restrict or control how you use your borrowed stablecoins.

Stablecoin Availability by Chain

Here is a general overview of stablecoin availability across the chains supported by Borrow:

Availability may change as Borrow integrates new protocols and chains. The most current information is always displayed in the lending offer listings on the platform.

Interest Rates and Stablecoins

Interest rates for borrowing stablecoins are set by the underlying lending protocols, not by Borrow itself. These rates are determined by supply and demand within each protocol's lending market:

• When demand for borrowing a particular stablecoin is high relative to supply, interest rates increase
• When supply exceeds demand, interest rates decrease

This means that USDC and USDT may have different interest rates on the same protocol, and the same stablecoin may have different rates across different protocols. Borrow aggregates all of these offers so you can compare rates across protocols and stablecoins in one place.

Variable vs. Fixed Rates

Most lending protocols on DeFi operate with variable interest rates that fluctuate based on market conditions. This means your borrowing rate may change over time. Some protocols offer more stable rate mechanisms, but truly fixed rates are rare in DeFi lending.

Borrow shows you the current rate for each offer and tracks rate changes over time so you can make informed decisions about which offer to select.

Repaying Your Loan

When it is time to repay your stablecoin loan and retrieve your Bitcoin collateral, you need to return the same type of stablecoin you borrowed, plus any accrued interest. If you borrowed USDC, you repay in USDC. If you borrowed USDT, you repay in USDT.

This is worth keeping in mind when choosing your stablecoin. If you plan to convert your borrowed stablecoins into a different asset, make sure you can easily convert back to the same stablecoin when repayment is due.

Frequently Asked Questions About Stablecoins on Borrow

Are stablecoins risk-free?

No. While stablecoins are designed to maintain a $1 value, they carry risks including issuer risk (the company backing the stablecoin could face financial or regulatory issues), smart contract risk (the token contract could have vulnerabilities), and de-peg risk (the stablecoin could temporarily trade above or below $1 during market stress). Both USDC and USDT have maintained strong pegs historically, but no financial instrument is entirely without risk.

Can I borrow DAI or other stablecoins?

Currently, Borrow focuses on USDC and USDT as these are the most liquid and widely accepted stablecoins. The platform may add support for additional stablecoins in the future as new lending protocols are integrated.

What if the stablecoin I borrowed loses its peg?

If a stablecoin temporarily trades below $1, this can actually benefit borrowers because you could repay your loan for less than you originally received. Conversely, if it trades above $1, repayment would cost slightly more. Historically, major stablecoins like USDC and USDT have maintained very tight pegs, with deviations typically lasting only hours during extreme market events.

Summary

Borrow by Sats Terminal supports USDC as its primary stablecoin across all chains and protocols, with USDT available on select chains and protocols. Both stablecoins provide dollar-denominated liquidity against your Bitcoin collateral, and you can choose between them based on your preferences for transparency, liquidity, exchange compatibility, or interest rates. The platform's aggregation model lets you compare offers across both stablecoins and multiple protocols to find the best terms for your borrowing needs.