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Anyone Seen Tether’s Billions?

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Re: Anyone Seen Tether’s Billions?

#381

Post by SilasX »

arcticbull wrote: post #341
SilasX wrote: post #131

Earlier quoted context omitted.

>OP is obviously talking about CEX Certainly -- I agree OP (arcticbull) was replying to a comment about DeFI by explaining the dangers of a centralized exchange! That makes it a confused, unhelpful response, not one that "obviously" meant something coherent if you squint hard enough and practice sufficiently strained exegesis. >As for DEXs being manipulated, absolutely not sure why you believe that’s the case? This h…

Btw, re: DEXs I was thinking specifically of flash loan manips that exploited a number of platforms a few months ago. These involved briefly breaking the peg of stable coins on DEXs via short-term loans. [1] I think it's brilliant. > One of the most notorious flash loan attacks to have ever hit the space is the exploit on DeFi protocol bZx, where the attackers borrowed funds from the platform and quickly swapped them…

The relevant question is whether the peg can be broken long enough for the loan to get margin called (by someone else exploiting the smartcontract to liquidate collateral). Lasting for the length of a flash loan isn’t enough.

Re: Anyone Seen Tether’s Billions?

#382

Post by skizm »

Seems there is a (very large) market for a legit version of Tether. What's stopping some other company from doing what Tether does with more traditional commercial paper / US based short term loans / govt. bonds / etc.?

Re: Anyone Seen Tether’s Billions?

#383

Post by thefreeman »

trophycase wrote: post #298
xondono wrote: post #282

Earlier quoted context omitted.

> You can do it directly on FTX I’m no expert, but wouldn’t this be unrealizable? If tether were to fall it’s not crazy to think it would take with it most exchanges, given how most of them use USDT for maintaining operations.

This just isn't really the case any longer. Crypto has matured a lot in the last few years. And if you're still regurgitating the same FUD from 2016 you're in for a big surprise.

FTX has received nearly 30% of the $48,000,000,000 in tethers that have been "minted" in the last year. You are telling me if tether fails they aren't going to be affected?

Re: Anyone Seen Tether’s Billions?

#384

Post by ikeboy »

arcticbull wrote: post #377
ikeboy wrote: post #373

Earlier quoted context omitted.

Why do you think that? They treat USDT as any other coin, has no special status in the system. FTX is very well capitalized. Can you show me even napkin math that shows FTX going under if USDT blows up in a realistic scenario? (Going from $1 to $0 instantly isn't realistic.)

Why isn't going from $1 to $0 not realistic? Tether is completely centralized and has the ability to prevent token transfers on all major networks it operates on. They regularly add to their blacklist, much more often than other stablecoins. Were it seized by the DOJ, they could simply freeze all transfers subject to proof of AML/KYC and source of funds analysis. That would nuke the market for them immediately. I bel…

It's not realistic instantly. Even Madoff's victims got a recovery eventually. From OP we know at least 25% of tether's reserves is in a bank in cash. If it was seized I could see the market heading to 50-75c or so, there will be lots of people that want to gamble on an eventual recovery.

I'm very skeptical that FTX has 10B USDT on the balance sheet. OP here says Sam has billions of tether, which makes sense but is not enough to blow them up, and is likely in Alameda being as he says it's for trading, not in FTX.

(Of course it's possible that FTX has 10B in USDT deposits, but that belongs to their customers who would be very sad if it nuked but doesn't directly hurt FTX.)

Futures insurance fund may be an issue, yes, especially in scenarios where it shifts very rapidly. If you have math on a plausible scenario and total losses across the major markets I'd be interested in seeing it. But you'd have to be looking at several billion in losses or at over 1B directly attributable to FTX for them to go bust - they've raised over a billion and make 350M/year per recent Forbes article, so that's a lot of capital.

Re: Anyone Seen Tether’s Billions?

#385

Post by thefreeman »

jimmydorry wrote: post #227
forgotmyoldname wrote: post #183

Earlier quoted context omitted.

Keep in mind that the original Ponzi scheme ran for quite a while and even had the media defending it as a great investment. Tether (and most crypto) seems like someone copied Ponzi's original scheme 1:1. Put in some money, transfer it to another format (Tether to other crypto, with Ponzi it was stamps), then eventually pull out loads of cash. Some people will undeniably get rich off it. But it's not sustainable.

The part I have never seen elaborated on in the "Tether is a Ponzi" claims is at what point will people using Tether make money? Tethers are IOUs to facilitate moving USD between financial institutions (mainly between exchanges, and mostly used by the exchanges themselves). You can spend $1 USD to get 1 Tether that is "redeemable" (by trade, not through the Tether company) for exactly $1 USD. A Ponzi requires some ki…

The payout is the complicit exchanges wash trading Bitcoin, SOL, etc., with freely printed and unbacked tethers, in order to drive the price up. The more crypto goes up, the more people FOMO in and trade, the more money the exchanges make.

Re: Anyone Seen Tether’s Billions?

#386

Post by Cthulhu_ »

hedberg10 wrote: post #350
smoyer wrote: post #344

Earlier quoted context omitted.

Wow ... I'm realizing what a completely unremarkable education and career I have. I've been a CTO twice but perhaps this shows what it would take to be a deputy CEO.

Well, I'll have you know I graduated summa cum laude from Lemönade Ständ Universität, which is a very prestigious institution in Luxemburg, when I was 6.

I'll have you know I graduated top of my class in the Navy Seals, and I've been involved in numerous secret raids on Al-Quaeda, and I have over 300 confirmed kills. I am trained in gorilla warfare and I'm the top sniper in the entire US armed forces.

Re: Anyone Seen Tether’s Billions?

#387

Post by ikeboy »

thefreeman wrote: post #383
trophycase wrote: post #298

Earlier quoted context omitted.

This just isn't really the case any longer. Crypto has matured a lot in the last few years. And if you're still regurgitating the same FUD from 2016 you're in for a big surprise.

FTX has received nearly 30% of the $48,000,000,000 in tethers that have been "minted" in the last year. You are telling me if tether fails they aren't going to be affected?

That belongs to their customers who will lose a lot if tether fails. Unclear why it would cause FTX directly to lose money - main mechanism is if insurance fund isn't enough to cover liquidations if the price shifts very rapidly but that still doesn't seem enough to blow through their significant capital.

Re: Anyone Seen Tether’s Billions?

#388

Post by arcticbull »

SilasX wrote: post #381
arcticbull wrote: post #341

Earlier quoted context omitted.

Btw, re: DEXs I was thinking specifically of flash loan manips that exploited a number of platforms a few months ago. These involved briefly breaking the peg of stable coins on DEXs via short-term loans. [1] I think it's brilliant. > One of the most notorious flash loan attacks to have ever hit the space is the exploit on DeFi protocol bZx, where the attackers borrowed funds from the platform and quickly swapped them…

The relevant question is whether the peg can be broken long enough for the loan to get margin called (by someone else exploiting the smartcontract to liquidate collateral). Lasting for the length of a flash loan isn’t enough.

I suppose that's true, but are you confident that's not possible? I'm not but as you can probably tell I'm pretty skeptical :)

Re: Anyone Seen Tether’s Billions?

#389

Post by onlyrealcuzzo »

hmate9 wrote: post #132

You can short Tether on FTX. You have to pay ~4% funding per year to short USDT-PERP. But if you think Tether collapses within 25 years its a good bet (probably going to come a lot sooner).

Good luck shorting something unregulated.

When you play by the rules against cheaters, you usually lose.

Re: Anyone Seen Tether’s Billions?

#390

Post by ikeboy »

xondono wrote: post #303
trophycase wrote: post #298

Earlier quoted context omitted.

This just isn't really the case any longer. Crypto has matured a lot in the last few years. And if you're still regurgitating the same FUD from 2016 you're in for a big surprise.

> And if you're still regurgitating the same FUD from 2016 you're in for a big surprise. I’ve just given up on crypto at this point. I’m a big proponent in “invest in things you can understand”, and crypto is a space where very little people really understand what’s going. You can call that FUD if you want, but not acknowledging that crypto is a wild, wild west with a lot of shady corners, will set you up for a big r…

There happens to be a lot of opportunity now, and lots of ponzis / scams / bubbles / etc. You're right that understanding it is needed, I've done deep dives on many projects and am doing quite well overall. Not for the faint of heart.
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