An potential failure case for defi is that some contract: * Is looking at USDT pairs as well as USD pairs for a price oracle and doesn't handle USDT pairs goin

An potential failure case for defi is that some contract: * Is looking at USDT pairs as well as USD pairs for a price oracle and doesn't handle USDT pairs going to infinity well (i.e. BTC/USDT skyrockets) when tether goes to zero * Effectively hardcodes the value of Tether to $1 (can happen by accidentally treating a X/USDT pair as an X/USD pair) I suspect that the major lending protocols (AAVE, Compound) have enough attention and effort to not make such a basic mistake but there's a whole wide world of less competent protocols out there. This can happen to centralised venues as well of course but as far as OP is concerned those are too risky for the tether trade (an assessment I agree with).