Top stablecoins shed $7B in May as traders redeem tokens en masse • Hacker News Board

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#101

Post by nickelpro » Sun, May 22, 2022, 8:39 AM UTC

unityByFreedom wrote: post #100

Animats wrote: post #25

The big question with Tether has been, if they are holding commercial paper, whose commercial paper? Traders who deal in commercial paper of real companies that do real stuff don't see Tether present in that market. The dollar amounts are too big to hide. The suspicion is that their "commercial paper" is high-interest loans to other cryptocurrency companies. With the whole crypto sector in decline, those loans are at…

> This is how you get a 2008-type crash - loans which seem to be unrelated but are tied to a common market. How does this happen again 15 years later? Is it because we ineffectively dealt with 2008? A result of the repeal of Glass-Steagall? Or have we over regulated banking to the point the miscreants went underground to build things like crypto? I don't get it. Crashing over and over doesn't seem good for anyone.

Technologically distinct market, even if economically parallel, Glass-Steagall wouldn't have prevented this. The crypto companies have operated almost entirely outside of regulatory oversight prior to the last 18 months or so.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#102

Post by unicornmama » Sun, May 22, 2022, 8:39 AM UTC

exdsq wrote: post #83

hiq wrote: post #67

Earlier quoted context omitted.

> USDC (coinbase) is properly and regularly audited I've only found attestations just like USDT, where did you see an audit?

I’m sure I’ve seen an audit before but because Coinbase is a public company all finances have to be released so you should be able to see it there too?

IIRC USDC is run by Circle, a separate legal entity. While CB and Circle might be controlled by the same people, they are not subject to the same legal disclosure requirements.

https://en.m.wikipedia.org/wiki/Circle_(company)

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#103

Post by LatteLazy » Sun, May 22, 2022, 8:39 AM UTC

unityByFreedom wrote: post #100

Animats wrote: post #25

The big question with Tether has been, if they are holding commercial paper, whose commercial paper? Traders who deal in commercial paper of real companies that do real stuff don't see Tether present in that market. The dollar amounts are too big to hide. The suspicion is that their "commercial paper" is high-interest loans to other cryptocurrency companies. With the whole crypto sector in decline, those loans are at…

> This is how you get a 2008-type crash - loans which seem to be unrelated but are tied to a common market. How does this happen again 15 years later? Is it because we ineffectively dealt with 2008? A result of the repeal of Glass-Steagall? Or have we over regulated banking to the point the miscreants went underground to build things like crypto? I don't get it. Crashing over and over doesn't seem good for anyone.

In this case the damage will be limited to a bunch crypto companies. The issue before was it hit companies we relied on for things like mortgages and current accounts. Crypto companies can just be allowed to fail and no one except their users will be effected.

Hence they are not regulated.

So even keeping GS (which was limited to big banks and a few similar institutions) wouldn't have made any difference. Not that keeping it would necessarily have been a bad ide...

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#104

Post by fastball » Sun, May 22, 2022, 8:40 AM UTC

ww520 wrote: post #86

The collateral for DAI are hihgly crypto correlated - 43.8% USDC, 32.1% ETH, 11.3% WBTC, 5.9% USDP, and others. ETH and WBTC are just Ethereum and BTC, both of which have dropped considerably recently. USDP somehow dropped to ~$0 since April. USDC is sworn to be 100% USD backed so let's take that at face value. DAI is said to have 150% over-collateralization. ETH & WBTC have dropped more than half. Let's say just off…

DAI's current collateralization ratio is 157.67%. You can verify this straight from the Ethereum mainnet.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#105

Post by LatteLazy » Sun, May 22, 2022, 8:41 AM UTC

Animats wrote: post #25

The big question with Tether has been, if they are holding commercial paper, whose commercial paper? Traders who deal in commercial paper of real companies that do real stuff don't see Tether present in that market. The dollar amounts are too big to hide. The suspicion is that their "commercial paper" is high-interest loans to other cryptocurrency companies. With the whole crypto sector in decline, those loans are at…

Of course, if they have been making a profit for however long they've been open, they should have a rainy day fund to cover those risks...

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#106

Post by uwuemu » Sun, May 22, 2022, 8:41 AM UTC

somebodythere wrote: post #95

mellavora wrote: post #90

Earlier quoted context omitted.

Please check your local regulations on this. What Uwuemu says makes sense, but tax law does not have to make sense. I might be wrong, but I believe the IRS views every transaction as a taxable event. Crypto -> crypto included.

You are right. When you trade crypto->crypto, the IRS views it as if you traded crypto->USD then USD->crypto.

so when you buy 1 btc for $30k, trade the btc for 100 of bscoin, bscoin rises to 50 bscoin pet 1 btc, you change back to btc, now you have 2 btc, but the next day big crash occurs and 1 btc is worth just 10k... you cash out and there you have it, a $10k loss... but, you're supposed to pay the tax man on the bscoin -> btc trade? That makes no sense. And then what, you'll want that tax back because of the loss? More BS paperwork for no reason? And all this for what?

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#107

Post by withinboredom » Sun, May 22, 2022, 8:42 AM UTC

nathias wrote: post #26

OtomotO wrote: post #20

The moment I learned that people want to buy crypto as a means to get rich in (evil ;)) fiat money, I knew I had a ponzi scheme in front of me. The interesting idea behind crypto once was to have a totally different system. Yet in reality, with greedy apes on a spacerock, it was an unreachable Utopia

different systems historically come about by extreme violence, genocides and migrations of peoples, a little icky shills and ponzis is a very low price

Like contributing heavily to global climate change?

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#108

Post by chii » Sun, May 22, 2022, 8:45 AM UTC

exdsq wrote: post #82

mindwok wrote: post #68

Earlier quoted context omitted.

Does this really matter though? Is it any different to drug lord having a tonne of dirty cash they can’t use anywhere because all the useful places you could put it want nothing to do with you? Watching from the sidelines, the Crypto world seems to just be morphing into the normal financial world.

> Watching from the sidelines, the Crypto world seems to just be morphing into the normal financial world. Say this is true, how amazing would that be for countries without existing banking infrastructure to easily access it?

this is already being done via mobile phones. Crypto doesn't solve the problem of being unbanked. In fact, the requirement that you need good internet speed for crypto to run locally means it's even harder for a place without infrastructure to participate.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#109

Post by web4 » Sun, May 22, 2022, 8:46 AM UTC

thehappypm wrote: post #75

web4 wrote: post #60

Earlier quoted context omitted.

the majority of crypto is being held in non custodial wallets, not exchanges. a better way to frame your comment: why does the world use Stripe and PayPal when you can just go to your bank and ask them to setup a multi day long wire process from bank A to B for less fees?

People do both, every day, what is your point?

the point is that Stripe achieves some features for certain users that a wire does not. and crypto achieves some features for certain users that Stripe does not.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#110

Post by hestefisk » Sun, May 22, 2022, 8:47 AM UTC

OtomotO wrote: post #31

chii wrote: post #27

Earlier quoted context omitted.

> The interesting idea behind crypto once was to have a totally different system. the problem with this idea is that this idea of a "different" system is just merely going to evolve back into what we have today. The fundamental needs of a financial system doesn't change much, and what we have today is fit for purpose (mostly - there's efficiency to be had and red tape to cut).

It is until you're on a list, for whatever reason. When states and countries can just block your access to your bank accounts, because you're on the other side of interests, it gets...Interesting With a decentralised approach, such actions would've needed to be implemented in the real world, not merely by the flick of a virtual lever.

Those lists can come in quite handy when you need to deal with people like Russian oligarchs …