Tether minted most USDT to just 2 firms – Alameda and Cumberland • Hacker News Board

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#31

Post by crazydoggers » Thu, Aug 12, 2021, 4:12 PM UTC

rubyist5eva wrote: post #13

If it wasn't obvious from the get go that Tether was a scam, what more do you need.

> Based on the information Protos has gathered, Cumberland is apparently the number one liquidity provider in crypto, period — thanks to Tether.

Not saying there’s nothing nefarious occurring, but it also doesn’t scream scam. The whole point of Tether is to supply liquidity to the crypto market. So is it surprising firms specializing in it utilize an outsized share??

The thing is tether is pegged. It’s not like if you buy a million dollars worth you’ll get rich. In fact that money is now tied up in an asset that doesn’t grow and will slowly shrink due to inflation.

What would be much more problematic is tether being used by large criminal organizations to help shelter or launder money, but I haven’t yet seen evidence of that.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#32

Post by jqpabc123 » Thu, Aug 12, 2021, 4:12 PM UTC

rubyist5eva wrote: post #13

If it wasn't obvious from the get go that Tether was a scam, what more do you need.

It doesn't end there.

Slightly less obvious is the fact that Tether and other "Stable coins" are the only "stability" that exists in the crypto marketplace. More than half of all crypto trades involve stable coins.

And exchanges play along (wittingly or not) with the ruse for their own benefit.

So if Tether is a scam, so is bitcoin and the entire crypto marketplace.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#33

Post by sprafa » Thu, Aug 12, 2021, 4:14 PM UTC

jqpabc123 wrote: post #32

rubyist5eva wrote: post #13

If it wasn't obvious from the get go that Tether was a scam, what more do you need.

It doesn't end there. Slightly less obvious is the fact that Tether and other "Stable coins" are the only "stability" that exists in the crypto marketplace. More than half of all crypto trades involve stable coins. And exchanges play along (wittingly or not) with the ruse for their own benefit. So if Tether is a scam, so is bitcoin and the entire crypto marketplace.

USDC has been audited and it's solid. I know of people in large banks who are working with USDC and they've vouched for it being 100% ok.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#34

Post by backprop1993 » Thu, Aug 12, 2021, 4:14 PM UTC

NickM wrote: post #3

There are a lot of areas of crypto where I feel like I have a pretty good understanding, but I genuinely don't understand why anyone would "invest" in a stablecoin. What advantage does holding something like USDT offer over simply putting dollars in a bank account?

Could they be selling it at a discount, like $1.00 - X discount per Tether and allowing these other firms to benefit in order to get the flow? Bulk discounts to their friends?

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#35

Post by backprop1993 » Thu, Aug 12, 2021, 4:15 PM UTC

ceejayoz wrote: post #25

purple_ferret wrote: post #15

Earlier quoted context omitted.

Pretty straightforward: You can currently get 8.88% APY return on lending stablecoins on Celsius[0]. It's also much easier to borrow and use in incredibly risky contracts, yield farming, etc Stablecoins let you engage in much more risk than USD without the volatility of crypto prices. [0] https://celsius.network/earn-rewards-on-your-crypto

If a bank offered me 8.88% APY for depositing USD, I'd be pretty suspicious of a catch.

There is a catch, but you won't find out what it was until they loose all of the money they are holding. There is probably a 50/50% chance this is just a Ponzi, and if it isn't it is some complicated strategy which can not handle black or even grey swan events, and there is a 5% chance there is a bug in their code that allows for all the funds to be stolen.

But in the mean time you can get an 8% return.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#36

Post by ceejayoz » Thu, Aug 12, 2021, 4:16 PM UTC

gdvvc wrote: post #26

NickM wrote: post #3

There are a lot of areas of crypto where I feel like I have a pretty good understanding, but I genuinely don't understand why anyone would "invest" in a stablecoin. What advantage does holding something like USDT offer over simply putting dollars in a bank account?

You don't need to pay taxes. Example: You earn $1000/month. Cost of living is $500/month, labour tax is $500/month. By using cryptocurrency you can skip tax and save up $500/month, in legit employment (labour law, worker rights protection) you save up $0/month, you work for free, hand to mouth.

Don't mistake OJ getting away with murder for OJ being permitted to murder. You need to pay taxes. You're just illegally not doing so.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#37

Post by jqpabc123 » Thu, Aug 12, 2021, 4:16 PM UTC

crazydoggers wrote: post #31

rubyist5eva wrote: post #13

If it wasn't obvious from the get go that Tether was a scam, what more do you need.

> Based on the information Protos has gathered, Cumberland is apparently the number one liquidity provider in crypto, period — thanks to Tether. Not saying there’s nothing nefarious occurring, but it also doesn’t scream scam. The whole point of Tether is to supply liquidity to the crypto market. So is it surprising firms specializing in it utilize an outsized share?? The thing is tether is pegged. It’s not like if yo…

The thing is tether is pegged.

I think the point you're missing here is that there is no logical basis for the "pegging".

It's pegged because crypto exchanges play along with the pegging fantasy.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#38

Post by skybrian » Thu, Aug 12, 2021, 4:16 PM UTC

That’s somewhat interesting but doesn’t tell us very much. It seems like the next question is what assets these firms trade for Tether, are those assets reliable or are they tainted in some way, and where did they get them from?

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#39

Post by X6S1x6Okd1st » Thu, Aug 12, 2021, 4:17 PM UTC

sprafa wrote: post #33

jqpabc123 wrote: post #32

Earlier quoted context omitted.

It doesn't end there. Slightly less obvious is the fact that Tether and other "Stable coins" are the only "stability" that exists in the crypto marketplace. More than half of all crypto trades involve stable coins. And exchanges play along (wittingly or not) with the ruse for their own benefit. So if Tether is a scam, so is bitcoin and the entire crypto marketplace.

USDC has been audited and it's solid. I know of people in large banks who are working with USDC and they've vouched for it being 100% ok.

Yeah USDC appears to be solid, there are also algorithmic stablecoins that appear to be holding well even under 50% drops over 1 or 2 days (DAI appears to be the one working best)

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#40

Post by backprop1993 » Thu, Aug 12, 2021, 4:18 PM UTC

throwup2021 wrote: post #27

NickM wrote: post #3

There are a lot of areas of crypto where I feel like I have a pretty good understanding, but I genuinely don't understand why anyone would "invest" in a stablecoin. What advantage does holding something like USDT offer over simply putting dollars in a bank account?

As an individual trader running an algorithmic arbitrage operation at > 40 exchanges, I have to. You can count me in for USDT 56k. I am small fish. My algorithms constantly watch USDT/USD price at 3 exchanges which are independent from Tether Inc, and if USDT drops below $0.95 at one of them, they stop issuing orders selling to USDT.

Are you saying that the exchanges are forcing a $1 +/- 0.05 price range for Tether instead of letting it float freely? Interesting.