What is the profit model of USDT company, which earns $54 million a day with only 150 employees? USDT's Q2 financial report has been released, and the most eye-catching feature is its Q2 net profit of $4.9 billion, second only to traditional payment giant Visa, leaving Mastercard and PayPal behind. Then came the promotion that stablecoins can achieve ultra-high returns, guaranteed profits, risk-free profits, and outperform traditional payment institutions and banks in efficiency; Is that really the case? Next, let's break down whether the USDT business model is "normal" and what is the correct profit model for stablecoins. 01. The amazing financial report of USDT According to the financial report, Tether Corporation (USDT issuer) achieved a net profit of $4.9 billion in Q2. From the table below, it can be seen that Tether's circulation scale is only 1/20 of card decks and 1/3 of payment institutions, but its net profit in one quarter exceeded Mastercard, second only to Visa. This earning ability is terrifying. 02. Profit model of USDT What achieved nearly 20 times leverage? There are several main reasons for this 2.1. Annualized return on stored value assets 7% According to Tether's audit report for the first half of 2025, USDT's net profit was $5.7 billion. Among them, $3.1 billion comes from US dollar assets, and $2.6 billion comes from high-risk and high return assets such as Bitcoin, gold, and mortgage loans. The puzzle has been solved now. He took out 20% of his reserve assets to "speculate on currency, gold, and lend money", which is why he achieved such a high income. 2.2.1 Extremely low operating costs From the audit report, we can find that the company's net profit is actually close to that of USD treasury bond bonds (3.8% -4.45), which means that the company has almost no operating costs. How was it achieved? Just making money, doing nothing but system maintenance. He achieved extremely low operating costs by not applying for licenses, not accepting takeovers, not doing anti money laundering, not doing market promotion, and not doing customer maintenance. However, these links often account for a large proportion of costs in traditional financial institutions. 2.2.2. Only enter and not exit the "Pixiu" mode Interestingly, the more non compliant USDT is, the more profitable it is. Due to the high market demand and the fact that banks do not provide settlement channels, he only collects money and does not exchange it. This makes it almost impossible for him to withdraw money, making it more convenient for him to operate the fund pool. To reduce the exchange rate, he also raised the exchange threshold, requiring customers over $100000 to directly purchase USDT from him, and redemption can only be made by these customers. Tether retail investors have no choice but to exchange USDT on the exchange or privately. So, this "Pixiu" model of only entering and not exiting allows Tether to freely use customer reserve funds for various investments and arbitrage to earn super high returns. 2.3 USDT Operation Model The biggest feature of USDT is the widely discussed "dual layer operation arbitrage" 2.3.1 Double layer operation spread arbitrage The characteristic of stablecoins is that "coins" and "money" operate separately, and users use tokens to trade with each other. The money is stored in a custodial account and does not require payment of interest to the user. This is equivalent to zero cost financing, and then using these funds to invest in high-yield products for profit, which is a arbitrage model. USDT not only invests in safe US dollar assets, but also makes high-risk investments to obtain high returns. As long as there is no run on the market, Tether can continue to make money. 2.3.2 Surface Compliance Response to Regulatory Compliance Although USDT is a wild path, it cannot be done too much, otherwise it may cause a crisis if users run on it. So we still made some compliance improvements to meet the requirements of regulators and shareholders. 1) Third party audit of stored value assets USDT also accepts audits from third-party accounting firms, but only provides audit reports and does not conduct detailed audits. 2) Excess reserves meet regulatory requirements Due to multiple instances of USDT refusing audits, running runs, and unanchoring in the past. In order to meet regulatory requirements and enhance user confidence, his excess reserves are generally maintained at over 10% (such as 16% in Q2 2025); 2.3.3. Share profits with shareholders After doing so much compliance, don't think he's too noble. In fact, it's just to share the profits with shareholders. Tether's dividends are generous enough, with dividends distributed every quarter, totaling $7.3 billion in the first half of 25 years; Over the course of 24 years, 11.69 billion US dollars were distributed. 2.4. Can the USDT model be replicated? To be honest, comparing Tether with Circle, payment institutions, and banking institutions is already quite absurd, as they are not doing things from the same dimension. 2.4.1 USDT Another Black Box The emergence of blockchain originated from the subprime mortgage crisis in 2008. At that time, traditional financial institutions packaged subprime mortgages into wealth management products for global sales through opaque operations, ultimately triggering the global financial crisis. And USDT has actually created a new "black box" in the form of tokens. If it is not regulated, it is difficult to be accepted by the laws of various countries (including the United States) 2.4.2. Transitional dependence on reserve assets In fact, the USDT profit model, which heavily relies on reserve assets, inherently has significant cyclicality. For example, interest rate cuts in the US dollar, cryptocurrency assets, and financial market volatility can all lower a company's earnings, and the ceiling for growth is also limited. 03. The profit model of USDC In fact, stablecoins like USDT that operate on both black and white horizontal jumps have missed the opportunity to enter the market. It is worth referring to the "good kid" USDC in stablecoins. 3.1 Operating Model of USDC Stablecoins require licensed operations, anchored fiat currencies, real identity verification, and liquidity requirements to ensure customer redemption. I think everyone has heard these concepts a lot. Now let's break down his operating model. In fact, Circle's operating model is very similar to traditional payment networks; 1) On chain: supports the issuance and redemption of fiat currencies, as well as peer-to-peer transactions; 2) Off chain: Placing major assets in a custodian bank through payment networks and opening pre deposit accounts with major banks worldwide to ensure liquidity exchange for users. This way, users no longer need to use over-the-counter trading. 3.2. Profit Model of USDC How to operate and make money with a legitimate stablecoin, and what are the costs and expenses involved? (As shown in the picture). 3.2.1 USDC Asset Structure Firstly, let's take a look at the asset structure disclosed in the USDC audit report and the revenue situation disclosed in the financial statements. (Please refer to the link at the end of the article for the original information) 1. Asset Structure Compared to USDT, the asset structure of USDC is relatively simple, consisting entirely of the purchase of US dollar fiat assets. Another characteristic is that its funds are liquid. 1) Reserve fund assets: These assets are stored in custodian banks in the United States, which purchase US Treasury bonds. 2) Other reserve assets: This portion of funds is used to be stored in different bank deposit accounts, providing users with fiat currency exchange. 2. Income and benefits According to USDC's Q1 financial statements, the quarterly revenue of USDC is $590 million. If combined with annualized returns of 3.8%, it is lower than the yield of US Treasury bonds. This revenue structure is relatively realistic, as it needs to ensure liquidity in exchange. 3.2.2 USDC Profit Model Compared to the unattractive appearance of USDC, USDC is a stable growth ecosystem. 1) Anchor assets to earn interest spreads USDC also relies on dual layer operation to earn spread arbitrage, but it is 100% anchored to fiat assets and earns reasonable interest income. 2) Most of the income is invested in operations The majority of USDC's revenue is used for ecological operations, including marketing, operational management, compliance construction, global network building, and depreciation expenses. These expenditures aim to better promote the token and serve legitimate users. 3) A small amount of excess reserves Due to all anchored secure US dollar assets, Circle only needs to pay a small amount of excess margin. And only make a small faction towards shareholders. 4) Sustainable ecological income Although compliance may seem costly, Circle primarily hopes to generate profits through ecological innovation rather than relying solely on interest income from reserve assets, as the latter will be affected by the decline in US dollar interest rates and fluctuations in financial markets. 3.2.3 USDC sustained returns As mentioned earlier, relying solely on stored value assets for arbitrage is actually unsustainable, as the US dollar will lower interest rates and there will be fluctuations in Bitcoin and financial markets. Although high returns can be obtained in the short term, the ceiling is limited. 1. Basic income (customer acquisition during interest rate hike cycles) The reason why Circle is willing to invest 100% of its US bonds is that the majority of its profits are invested in the operation of the platform. It's because seeing the interest rate hike cycle can quickly attract customers. 2. Platform services (cross-border payment settlement) Stablecoins have natural advantages in cross-border payments. By collaborating with banks, payment institutions, and e-commerce, they can not only provide instant settlement services, but also promote the usage habits of digital dollars, thereby continuously charging service fees to the platform. 3. WEB3 ecosystem (on chain USD trading) With the habit of using digital dollars, transactions, loans, investments, and entertainment can be conducted on the chain, which will give rise to a rich ecosystem of applications. The end of the Internet is "loan", in fact, WEB3 is also. 4. Stablecoin-as-a-Service (One Stop Token Service) Not only does Circle issue its own coins, but it also provides STaaS (stablecoin as a service), a one-stop token service. In this way, banks, payment institutions, Jinko Corporation, cross-border e-commerce, and WEB3 projects can all issue and use tokens. Speaking at the end Focusing on 'stored value asset arbitrage' is not only limited in ceiling, but also unsustainable. The true profit model of stablecoins is still "token customer acquisition, payment method habit cultivation, on chain financial services, and STaaS diversification". To put it bluntly, it means playing the growth gameplay of "mutual gold" on the chain again. (Thank you for organizing, Brother Gang) 1. Tether Audit Report https://tether.to/en/transparency/?tab=reports 2. Circle Audit Report: https://www. (circle.com)/transparency stability