Tether (USDT) was one of the first centralized stablecoins to be introduced. Every USDT is supposedly backed by $1 in the issuer’s bank account. However, one major downside to USDT is that users need to trust that the USD reserves are fully collateralized and actually exist.

DAI is the native stablecoin used most widely in the DeFi ecosystem. It is one of the preferred USD stablecoin used in DeFi trading, lending, and more.