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

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

#881

Post by i_am_jl » Thu, May 12, 2022, 6:21 PM UTC

f0xJtpvHYTVQ88B wrote: post #686

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…

> Tether reserves the right to refuse registration to, to bar transactions from or to, or to suspend or terminate the administration of Services, Digital Tokens Address, or Digital Tokens Wallet for or with, any user for any reason (or for no reason) at any time > 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…

Hahaha holy shit, how has there been so much discussion about Tether that doesn't start and end citing these clauses?

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

#882

Post by ambrozk » Thu, May 12, 2022, 6:26 PM UTC

digianarchist wrote: post #609

corndoge wrote: post #105

Earlier quoted context omitted.

"Deserves" is a word with variable meanings. You learn early on not to touch hot stoves. Do you morally deserve to get burned if you touch the stove anyway? Arguably no, but in the other meaning of "you should've known better", you kinda do deserve it.

There's a very natural feedback mechanism to a hot stove. When former world leaders are turning up and crypto conferences and the industry remains largely unregulated, then can you really blame people for investing?

> can you really blame people for investing

Yes, you can. You don't have to dig very deep into the crypto world to realize that a lot if not most of the participants have are not plain ol' honest folks making a big ol' mistake giving their hard-earned savings to a slick-talking salesman. They are conscious participants in what they know to be a get-rich quick scheme. They know it is shady, and they don't care, because they think they're going to get out before it crashes. They're motivated by greed, not innocence.

You can recognize this and still support regulation of the industry. One of the big reasons you need regulation is to protect people from their own stupid greed.

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

#883

Post by ambrozk » Thu, May 12, 2022, 6:28 PM UTC

hnbad wrote: post #159

bmacho wrote: post #149

Earlier quoted context omitted.

> Nobody deserves to be exploited, robbed or otherwise for any reason. Well they tried to exploit, rob or otherwise me, that is, getting money from thin air without creating any value. How is that fair in any moral system? (That wasn't what GP said tho.)

By that logic they still "deserve" it less than any of the crypto grifters that were able to cash out with orders of magnitude ROIs.

Yeah, but they still deserve it.

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

#884

Post by thaway2839 » Thu, May 12, 2022, 6:31 PM UTC

oldgradstudent wrote: post #877

t0mas88 wrote: post #616

Earlier quoted context omitted.

Well not completely, in the sense that they seem to be exchanging USDT for USD at a 1:1 ratio if you show up with 100k or more. There have been no reports of people that tried to get that and didn't get it. On the other hand maybe people holding a lot of USDT wouldn't not want to tell anyone else if they were unable to redeem it before they had sold it all on the exchanges...

> There have been no reports of people that tried to get that and didn't There were no reports of Bernie Madoff not being able to repay investors until the day he ran out of cash.

Even that never really happened, did it? Madoff was never not able to make a payment.

His kids reported him to the police before they could be found out by anyone else. Of course, as part of the reporting, they also got immunity from the consequences of the company they worked for being an elaborate ponzi scheme.

I suspect it's highly likely that this was a scheme they came up with to ensure that no one in the family, other than Madoff himself, would have to suffer the consequences of their crime.

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

#885

Post by mcintyre1994 » Thu, May 12, 2022, 6:32 PM UTC

0xffff2 wrote: post #847

yreg wrote: post #836

Earlier quoted context omitted.

Tether itself is shady and I have my doubts about them, but the concept is simple. You mint some coins and sell them for $1 each. Then watch the exchanges and any time the price is above $1 you mint some coins and sell them. Any time the price is below $1 you buy some coins and burn them. Doing this and only this you should always have more dollars in hand than the amount of coins in circulation.

>any time the price is above $1 you mint some coins and sell them What if you run out of dollars and the price is still above $1?

I don’t think there’s any serious risk of the price getting stuck above $1, because there’s no reason for anyone to buy at that price. Unless it de-pegs completely and becomes a totally speculative asset and everyone just ignores the offer to buy them for $1 I guess?

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

#886

Post by thaway2839 » Thu, May 12, 2022, 6:33 PM UTC

whimsicalism wrote: post #746

lxgr wrote: post #739

Earlier quoted context omitted.

Isn't Dai crypto-backed? That would give it a risk profile, but also not make it risk-free: Counterparty risk (Tether) vs. exchange rate risk of the backing assets (Dai).

It's multi-collateralized, so backed by crypto, but also backed by crypto that is backed by actual paper (ie. USDC counterparty risk) and is overcollateralized (so the backing is more than how much $ DAI there is by a substantial margin - ~166%). It has a number of additional clever tricks to keep the peg (burning MKR, etc.), but unlike Terra is not only clever tricks.

Lol, sounds like the mortgage backed assets before the housing crash.

"Back it up with enough securities that are backed up by enough securities that are backed up by enough securities, you will turn the literal shit the eventual security is backed up by into gold".

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

#887

Post by thaway2839 » Thu, May 12, 2022, 6:36 PM UTC

yreg wrote: post #836

bootlooped wrote: post #601

Earlier quoted context omitted.

Did that ever come out of the pool of money that went into minting the tether? Or was it just more consumers getting in while others got out?

Tether itself is shady and I have my doubts about them, but the concept is simple. You mint some coins and sell them for $1 each. Then watch the exchanges and any time the price is above $1 you mint some coins and sell them. Any time the price is below $1 you buy some coins and burn them. Doing this and only this you should always have more dollars in hand than the amount of coins in circulation.

But why is anyone else buying Tether at above $1 if the entire strategy is based on selling above $1 and buying below $1?

You can't just sell something. For someone to sell something someone else needs to buy the same thing.

So to be able to execute the strategy correctly, you need an anti-human or anti-robot that always executes the strategy absolutely incorrectly.

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

#888

Post by drugstorecowboy » Thu, May 12, 2022, 6:39 PM UTC

mensetmanusman wrote: post #563

ekianjo wrote: post #479

Earlier quoted context omitted.

there are still bitcoins being mined. where is it deflationary?

The rate of coin generation matters. Imagine a world of 100 people and 100 dollars. If the population doubles, and the 100 dollars remains fixed, the value of the dollar has increased. If more dollars are not printed to maintain some inflation, people will slow spending hoping for 300 people the next year. Now, in the case of BTC, it’s not global population that matters, but the population of interested users, which…

Why would people slow spending due to a fixed money supply? The money they have now could potentially buy more in the future, but at some point you have to actually buy the thing you need or want. Conversely in in an inflating currency scenario yes I might spend the money sooner than I would otherwise, but then in the future I won't be able to spend it again, why is it so much better that I buy today instead of tomorrow?

I have heard the argument that deflation is just an unthinkable disaster for my entire life but I'm not convinced, rather it seems like a convenient excuse for countries to print their way out of budgetary problems.

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

#889

Post by shkkmo » Thu, May 12, 2022, 6:52 PM UTC

tootie wrote: post #776

shkkmo wrote: post #758

Earlier quoted context omitted.

> If they think Coinbase or Tether represent a systemic risk, they will find a way to bail out investors because the downside risk of doing nothing is too great. It's possible some of the major crypto institutions have reached Too Big To Fail status regardless of whatever statutory authority exists to protect them. That's silly. The only people who actually believe this are the ones who have so bought into the hype t…

It doesn't matter if it's a scam or if it provides value. Lots of activity leading up to the 2007 crisis was scammy but once enough people and institutions were exposed it had to be dealt with. If Moderna says they put all the cash in Tether and now they're broke and can't produce vaccines, they'll get bailed out. All that being said I don't actually think that we'll see anything like that. There will be some negativ…

Moderna might get bailed out...though I am skeptical how they would justify having so much cash in Tether rather than an actual bank and as such I highly doubt they would get terms as favorable as the banks got in 2008.

Tether itself certainly would not get bailed. There is literally zero chance that the US Government would decide to help keep Tether pegged. Tether simply isn't important enough to the broader economy, it only exists so that sketchy businesses that have trouble interacting with banks can have an easier access.

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

#890

Post by shkkmo » Thu, May 12, 2022, 6:58 PM UTC

vmception wrote: post #832

shkkmo wrote: post #828

Earlier quoted context omitted.

> So at one point they were 1:1 USD, which is actually a major revelation Is it a revelation or something you made up? NY OAG was confident they were able to prove that that Tether lied about backing in 2017, 2018, and 2019. Just because they don't have sufficient proof that Tether lied prior to 2017, doesn't make it a revelation that Tether was telling the truth. Indeed, given the trend, it seems quite reasonable to…

ah okay, thats a perspective.

I'm curious why you feel the need to try to distort and spin stuff to benefit a company like Tether? They don't deserve your loyalty and they help give the crypto community a bad name.