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Tether starting to lose its peg too, after Terra did

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Re: Tether starting to lose its peg too, after Terra did

#351

Post by maxerickson »

thkim wrote: post #259
adhesive_wombat wrote: post #30

The fact that they've been minting billions of tether without collateral should make it abundantly obvious that this isn't a stablecoin and never had been. Anyone can pretend to have a peg in the good times, that doesn't mean there's really a peg or that the peg will remain in bad times. And if you can't count on the peg in bad times, it's not a stablecoin. If you've been honestly working on the assumption that it is…

I think Tether can get away with less than 100% collateralization. At the current market cap of 82bn, even if they are only 20% collateralized, it takes 16.4bn one way movement to deplete their reserve. Is that likely event? Guess it depends, but I think market makers would be more willing to backstop them than UST shitshow. UST has "death spiral" structure that makes MMs less willing to backstop them once it goes on…

That would be okay if they called the currency lever.

Re: Tether starting to lose its peg too, after Terra did

#352

Post by NhanH »

irjustin wrote: post #291
charcircuit wrote: post #221

Earlier quoted context omitted.

The big fear with stable coins is for them to go into a death spiral and become worthless. Stablecoin are only worth $1 if people believe they are worth $1. When fear sets in and people no longer believe they are worth $1 it can cause the price to tank. Having a stablecoin be backed means that you can trust your stablecoins to not become worthless because they can be redeemed at anytime at a $1 price point even if th…

Ah so in theory I should be able to ask the USDT foundation for a dollar and they should be able to give it to me?

Yes, https://tether.to/en/transparency

Re: Tether starting to lose its peg too, after Terra did

#353

Post by ForHackernews »

davidweatherall wrote: post #189
adhesive_wombat wrote: post #30

The fact that they've been minting billions of tether without collateral should make it abundantly obvious that this isn't a stablecoin and never had been. Anyone can pretend to have a peg in the good times, that doesn't mean there's really a peg or that the peg will remain in bad times. And if you can't count on the peg in bad times, it's not a stablecoin. If you've been honestly working on the assumption that it is…

I don't understand how you bodge a stable coin startup. Surely you just mint the tokens in exchange for dollars, and then put ~50% of the dollars in zero risk investments (some form of treasury bonds), and then take the 0.5-1% interest per year as your revenue. Tether currently has $81b marketcap so you could be making $400-800m per year doing basically nothing?

Great, you've invented a boring old bank. That's not innovation. (Well, technically an unlicensed wildcat bank, but still)

Literally the only new thing about blockchains is an ecologically destructive brute-force solution to the byzantine generals problem. However, it turns out nobody except CS students cares much about that, so they have to dress it up with cartoon apes and web3 buzzwords.

Re: Tether starting to lose its peg too, after Terra did

#354

Post by ForHackernews »

Animats wrote: post #180

Tether is back up to around $0.98, but volume is high. Somebody is pouring cash into Tether to support the price. Similar over at UST. Price is back up to $0.60, but volume is far above normal. Remember, with a stablecoin, there is no upside to holding . Any indication of risk means it's time to get out. Even if Tether has enough reserves to get the price back to $1, there will be substantial cashing out. That's why…

> Somebody is pouring cash into Tether to support the price

Is that true? Where is this price coming from? Unregulated exchanges can display whatever numbers they want on their ticker, right?

Re: Tether starting to lose its peg too, after Terra did

#355

Post by can16358p »

ulzeraj wrote: post #329
Animats wrote: post #180

Tether is back up to around $0.98, but volume is high. Somebody is pouring cash into Tether to support the price. Similar over at UST. Price is back up to $0.60, but volume is far above normal. Remember, with a stablecoin, there is no upside to holding . Any indication of risk means it's time to get out. Even if Tether has enough reserves to get the price back to $1, there will be substantial cashing out. That's why…

> Remember, with a stablecoin, there is no upside to holding. As always people around here tend to see the world from their point of privilege. If you are in Turkey, Sudan or Venezuela right now there is a huge upside in holding a stable coin pegged to the dollar. Only 13% of the world population is lucky enough to live on a stable democracy with a stable economic system.

Yup. I live in Turkey, and don't trust the local currency (Lira) and the government's power over banks to keep my dollars too.

Crypto is the safest in that sense for me, and a stablecoin is ironically more trustworthy than my country's currency in general.

Yet I don't trust USDT or UST so I'm on relatively more trustable USDC or BUSD.

Re: Tether starting to lose its peg too, after Terra did

#356

Post by irjustin »

NhanH wrote: post #352
irjustin wrote: post #291

Earlier quoted context omitted.

Ah so in theory I should be able to ask the USDT foundation for a dollar and they should be able to give it to me?

Yes, https://tether.to/en/transparency

Right that's what they say but how do I or anyone else redeem that?

Otherwise there's no need for physical backing right?

Re: Tether starting to lose its peg too, after Terra did

#357

Post by brazzy »

lode wrote: post #188
tluyben2 wrote: post #112

Earlier quoted context omitted.

The religious (for a lack of better word as it is a religion to believe that cryptocurrencies are inherently better than other assets (outside NFTs) but they do believe that if you read twitter/reddit) people are hodling but all the 'saner' people I know went out in december. There was enough writing on the wall to know that 2022 would not be a good year for some assets (and it's just beginning). Only the real believ…

> it is a religion to believe that cryptocurrencies are inherently better than other assets (outside NFTs) Why would NFTs be worth anything more than the digital tulip bulbs of cryptocurrencies? NFTs are just as worthless IMHO.

Sidenote: the actual tulip bulbs were far less silly. They were a productive investment. You could plant them to make more bulbs.

Re: Tether starting to lose its peg too, after Terra did

#358

Post by pjc50 »

exactlythat wrote: post #333
pjc50 wrote: post #320

Earlier quoted context omitted.

If you say "don't go there, you'll be robbed" to someone, they insult you in return, and then get robbed, you're entitled to a bit of schadenfreude.

You’re entitled to quite a lot. It is those delightful moments, enjoyed quietly and within one’s own head out of common courtesy, that make all of life’s problems worth it. There are few feelings as remotely good as that one, and we’d all feel better admitting it to ourselves. Doesn’t speak to caring. They’ll listen to you next time, won’t they?

> They’ll listen to you next time, won’t they?

Obviously not.

The weird thing about having been on the internet so long is how nobody listens any more - for any idea, no matter how bad, you can find a community built around it, defending it against outsiders. A million micro-cults.

It wouldn't be so bad if there weren't serious negative externalities to the rest of us from this.

Re: Tether starting to lose its peg too, after Terra did

#359

Post by ilammy »

danjac wrote: post #290
shafyy wrote: post #55

Earlier quoted context omitted.

> If you've been honestly working on the assumption that it is, then you deserve to lose your (real) money to some crypto VCs on an island somewhere. The sad reality is that many poorer and financially illeterate people have been tricked by VCs and other grifters into this with billions of dollars spent in advertising. So, no, they don't deserve to lose their money to these assholes. These assholes need to be prosecu…

Matt Damon at least should never get work again. Except maybe shilling jewellery on PVC.

Feels good to be on the ‘righteous’ end of canceling people, eh?

Re: Tether starting to lose its peg too, after Terra did

#360

Post by alrs »

sshine wrote: post #71
shafyy wrote: post #55

Earlier quoted context omitted.

> If you've been honestly working on the assumption that it is, then you deserve to lose your (real) money to some crypto VCs on an island somewhere. The sad reality is that many poorer and financially illeterate people have been tricked by VCs and other grifters into this with billions of dollars spent in advertising. So, no, they don't deserve to lose their money to these assholes. These assholes need to be prosecu…

> many poorer and financially illeterate people have been tricked I’m sorry, but it’s worse than that. Whenever I’ve said “Tether is a scam waiting to blow up, and the evidence is obvious”, none of my smart peers had anything to say, either. The BTC price is hells high by this fake USD money printer. At least people are collectively waking up. Brrrr.

I think you're confusing "smart" for "upper middle class people with gleaming straight teeth."
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