They likely re-lend on crypto platforms where thanks to incentives and high borrow demand you can relatively easily get 15+% yields
For example anchor protocol offers 20% APY on UST deposited in it, and has done consistently for 6+months. As long as the peg holds and the protocol is solvent it's "free" money
Doesn't that just push the same question back a level? Where are these other platforms getting their profits from to sustain such high yields? If there's high demand for high-interest crypto loans, that means there should be platforms one can point to to trace the source of profit - the high-interest loans that fund the high-yield deposit platforms that fund this medium-yield deposit platform?
For example anchor protocol offers 20% APY on UST deposited in it, and has done consistently for 6+months. As long as the peg holds and the protocol is solvent it's "free" money