391–400 of 976 posts
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One upside: 0.5-1% interest per day at Bitfinex. > Remember, with a stablecoin, there is no upside to holding. The people running Tether has a stake in the upside. It's this moment where they need to convert their supposed holdings to sustain the price. It's not going to be expensive (maybe even profitable) given the high yield of USDT right now.
oh yeah 180% interest per year definitely isn't a scam
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…
Currency pegs and currency boards can work quite well. You just need sufficient assets to cover them. See https://en.wikipedia.org/wiki/Currency_board Btw, not only sovereign nations have these issues. Your bank also tries to maintain a peg between one dollar in its account books and one dollar in government money. Similar (but more roundabout) for things like Amazon gift cards. For a country without an established,…
Let's say you're a hedge fund looking for a one-way bet that will profit massively in a crypto crash (that stablecoins can't survive) and has no downside except carrying costs. Enter Tether, Terra, etc. Risk of loss at initial sale of 1, very low because tokens will not increase in value to 1.5 or 2. Profit potential? 100%. Everyone with a dash of creativity and a fund probably already is short these coins and has been for some time. "The Big Short" of 2022.
Tether inevitably drops to $0, evaporating in the order of $100B of funny money. Crypto market collapses, trading is halted on the large platforms, big exchanges go bankrupt.
This shocks the regular markets to a significant degree. Calls for strict regulation will follow, ending the state of crypto as we know it today.
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The point I wanted to make is that many (most?) retail customers deposited USD at a CEX like Binance/Bitfinex in exchange for USDT. So your retail fiat dollar didn't go directly to Tether Limited, the exchange bought liquidity from them.
If the CEXes act in good faith, they'll hold corresponding amounts of USDT in a wallet. So those would have been the parties who paid $ to Tether.
The entire concept of a "stablecoin" reminds me a lot of something from SIGBOVIK 2014. Keep in mind, this was written in 2014, before any stablecoins actually existed, and that SIGBOVIK is supposed to be a joke conference where people present extremely silly ideas as if they were real breakthroughs. > DollarCoin: We propose skipping the middleman and providing direct proof-of-dollar with a blockchain that consists of…
Tokenized dollars allow to benefit from the tech (smart contracts), which is itself great and opens a lot of possibilities.
What's not is: Ponzi schemes (Terra), crooks (Tether?).
Edit: There are valid stablecoins like USDC (they hold sufficient reserves) and even valid algorithmic stablecoins e.g. LUSD, backed by Ethers and with a legit protocol for ensuring over-collateralization that is also immutable.
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> Commercial paper is not dollars, so tether effectively admits it is not backed. What do you think backs bank deposits?
Banks don’t claim otherwise for years while providing misleading non-audit “audits”, and they have the FDIC to fix things for anyone under $250k if they collapse.
Something backed by commercial paper is by definition backed.
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Apparently you have to bring a minimum of $100K of USDT to get it redeemed into real money. I would say this is an incredibly stupid trade to try because you're relying on Tether actually paying out as promised.
Statements like this blow my mind . The entire point of Tether is that you can absolutely trust them with $100K, $1M, $10M, or whatever . It's backed, it's robust, it's tethered , and they guarantee payout. The promise is essentially the AAA security of the crypto world, the equivalent to US Treasury bonds or whatever. Meanwhile, the sentiment I keep hearing is yours: "You'd have to be absolutely nuts to trust these…
Strongly analogous to the eurobond crisis, and the mortgage tranche issue; there was a period in 2008/9 where all sorts of things were downgraded overnight.
> Take for example the US dollar treasury bonds. Even countries and people opposed to the United States and everything it stands for agree that it is AAA. People that hate the US agree that the USD is a stable currency and their bonds are secure. Literal enemies, legally at war will prefer to use USD over their own currency for many transactions!
Yes - and this is why Americans panicking about financial mismanagement always come across as so out of touch. USD is the currency everyone else runs to for safety.
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>This seems like there's no way they are opening themselves up to arbitrage like this. That's what defending the peg means.
But they get to buy and sell tethers themselves, right? If a T costs less than a dollar, and Tether's owners know that it's perfectly backed by a liquid dollar, why don't THEY buy it? If they don't, it suggests it's not, and they actually agree it's worth less than a dollar.
To buy them they would need to take their real USD, probably spread across investment instruments (e.g. in an ideal case where all they say is true, they would sell some government bonds they're holding), and bring it to an exchange where USDT is below 1 dollar. Then on that exchange they would go and buy, and make a small profit.
Based on the fact that they have managed to keep this thing around 1 USD for a long time, they have probably been doing this. But we don't know how fast they can do it (have to be faster than the others selling it), and we don't know how much cash they really have so they may have to stop doing it at some point if enough people try to sell.