Tether starting to lose its peg too, after Terra did • Hacker News Board

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

#651

Post by Sandworm5639 » Thu, May 12, 2022, 1:28 PM UTC

charcircuit wrote: post #496

bspammer wrote: post #250

Earlier quoted context omitted.

One thing I don’t understand here: where does the smart contract get the information of the current luna/usd exchange rate? It can’t be an api call surely, it must be on-chain somehow.

Validators vote on the current exchange rate. https://docs.terra.money/docs/develop/module-specifications/...

Do I understand this correctly: there's no inherent incentive to put the "correct" price, they just need to agree with each other. Essentially playing "Guess 2/3 of the average" but it's just "Guess the average".

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

#652

Post by alexk307 » Thu, May 12, 2022, 1:28 PM UTC

frostwarrior wrote: post #643

Traster wrote: post #558

The thing that I think some people miss about Tether is that it's not about whether it is backed enough it's either fully backed or it isn't. If it's not, it's not a question of whether it's back enough to weather this storm, it's about whether the people running it think they can weather this storm. If they think they can keep it running they'll sell whatever backing they have and keep the peg. But if they even thin…

Serious question, how can you sue over this kind of thing? I thought the whole point of crypto is that it's not regulated. And that also meant that if you got screwed then you are SOL.

They can be sued if they claim that they hold more assets than they are issuing. If you tell everyone that it's a dollar per coin, and suddenly there are 5 billion coins, you better have $5 billion to your name somehow.

Not sure if there have been similar lawsuits in the crypto world yet.

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

#653

Post by micromacrofoot » Thu, May 12, 2022, 1:28 PM UTC

mrep wrote: post #553

micromacrofoot wrote: post #529

Earlier quoted context omitted.

is that really the dream? I always thought it was just having a normal job, work 9-5 and come home to house/car/family

From wikipedia [0]: "The American Dream is a national ethos of the United States, the set of ideals (democracy, rights, liberty, opportunity and equality) in which freedom includes the opportunity for prosperity and success, as well as an upward social mobility for the family and children, achieved through hard work in a society with few barriers." [0]: https://en.wikipedia.org/wiki/American_Dream

I suppose I'm wondering if the definition of "hard work" has shifted. In the '50s and '60s was "hard work" like 60 hour weeks and "hustle economy" type of stuff? or was it just "doing a good job" 40 hours a week?

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

#654

Post by gitfan86 » Thu, May 12, 2022, 1:29 PM UTC

abzolv wrote: post #505

jiggawatts wrote: post #377

Earlier quoted context omitted.

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…

> 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. No, they don't. This is what Tether says in its ToS at https://tether.to/en/legal : "Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any R…

"other assets" is the important thing here. Can "other assets" be a bunch of Groupons? I don't see why not.

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

#655

Post by bitexploder » Thu, May 12, 2022, 1:29 PM UTC

sbarre wrote: post #499

raiyu wrote: post #468

Earlier quoted context omitted.

The American dream is to make it through hard work, what you are referring to is simple greed and laziness and it’s been around since humanity attained consciousness.

> The American dream is to make it through hard work Now that's the actual con, or at least a pipe dream. Hard work is never enough. Luck plays a huge factor but few who get lucky, and then rich, will ever admit to that part.

I admit it. Many of my peers do. Luck is fickle and hard quantify. Effort and decision making less so. It is at least obvious why people have such a bias.

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

#656

Post by ulzeraj » Thu, May 12, 2022, 1:29 PM UTC

ptero wrote: post #540

lupire wrote: post #533

Earlier quoted context omitted.

Where can I download gold coins?

You compare the convenience of a download against having an asset with a few millenia of history in your physical possession (which is not without its own risks) and pick your poison.

Try passing through border control on such countries while packing gold or expensive gold accessories.

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

#657

Post by criddell » Thu, May 12, 2022, 1:29 PM UTC

hbbio wrote: post #617

ptero wrote: post #463

Earlier quoted context omitted.

> There are valid stablecoins like USDC (they hold sufficient reserves) Those reserves are sufficient until they are not. There are always risks of losing the peg and anyone investing in them should be aware of and track the main ones. My 2c.

Unless the auditors (Grant Thornton, a reputable large company) are lying, they have 1:1 https://www.centre.io/hubfs/PDF/2022%20Circle%20Examination%...

They do until they don't.

Do you know where that money is and how is it insured?

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

#658

Post by influxmoment » Thu, May 12, 2022, 1:30 PM UTC

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…

Tether and UST are not comparable. Tether is a token you can redeem for USD with a questionable past. UST is a project started by a scammer. An algorithmic stablecoin. A Ponzi uses a Ponzi to prop up the price. And then head scammer used personal money to keep the charade going

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

#659

Post by zarzavat » Thu, May 12, 2022, 1:30 PM UTC

charcircuit wrote: post #434

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?

USDT is the worst in this regard since you have to deal in massive volume. The minimum withdrawal is $100k and fee on that is the greater of $1000 or 0.1%. https://tether.to/en/fees/

That seems like a fair policy to avoid getting DDoSed by withdrawals in periods of high demand (i.e. bank runs). Presumably they mainly intend to serve exchanges which are doing withdrawals in the $millions.

Not defending their other practices.

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

#660

Post by ulzeraj » Thu, May 12, 2022, 1:30 PM UTC

hypertele-Xii wrote: post #625

ulzeraj wrote: post #564

Earlier quoted context omitted.

Nothing you wrote makes any sense. We are talking about stable coins. Where does speculations fits here? Also could you make an argument without making accusations?

The "stable" part of the -coin is all marketing. It's true while enough people believe it's true... and if at any point enough people disbelieve it, it'll be everything but.

You are moving the target. I've asked how stable coins pegged to the dollar are considered speculative assets.