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

blockworks.co

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

#211

Post by pvarangot »

cormacrelf wrote: post #120
unityByFreedom wrote: post #100

Earlier quoted context omitted.

> 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.

The powers that be aren't trying to crash it all on purpose, nobody wants another 2008. They have produced a pretty hands-off response, because of a number of factors. Crypto has an explicit project to escape US regulation, so lots of money is in e.g. the Bahamas and difficult to target. Many companies are trying really hard to avoid even having US customers, so that's a hands-off win for regulation as the feds have…

Wouldn't regulating crypto need an influx of dollars from the exchanges or other liquidity providers back into the government? If that money doesn't exist or is hidden well enough regulation is only going to crash down liquidity providers and screw this people you are saying it should be designed to help.

The US is already very much ahead of most countries in regulating but not outright banning crypto. It's closer to banning it than let's say Switzerland. With the way they consider any sale a taxable event if US regulations were better for let's say the retail crypto trader as a whole they would all massively move to US regulated exchanges like Coinbase but that would remove a lot of "natural" circuit breakers like bots or manual arbits.

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

#212

Post by whimsicalism »

TekMol wrote: post #137
hestefisk wrote: post #112

Earlier quoted context omitted.

Because they provide nice yield. I can stake USDT on most exchanges and get 5-7% APY. I doubt those yields will hold for much longer though.

Which exchange pays you those 5-7% and why do they do that?

I don't know about 5-7% but you can get paid by uniswap for providing liquidity to speculators.

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

#213

Post by CTDOCodebases »

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…

Why would anyone buy Tether?

Because the most liquid trading pairs and futures use USDT. The same companies who borrow USDT from Tether happen to be the same people who run exchanges or act as market makers.

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

#214

Post by whimsicalism »

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?

You are wrong, both USDC and USDT are only attested, however USDC has tried to spin their attestation as an audit.

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

#215

Post by logifail »

lottin wrote: post #167
logifail wrote: post #93

Earlier quoted context omitted.

> when cashing out Cashing out meaning "selling crypto for fiat"? What about if you sell BTC for another crypto or for gold or ...

It means selling the asset, full stop.

> It means selling the asset, full stop

So it seems from the outside that stablecoins exist primarily to take advantage of grey areas in taxation legislation - and possibly also KYC/AML legislation - which allow investors in certain jurisdictions to avoid taxable events which would otherwise occur when trading.

Building a business model on dodging taxes isn't a great look, is it?

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

#216

Post by shawabawa3 »

TekMol wrote: post #11

What are people holding all those stable coins for? In contrast to other crypto currencies, nobody is holding it for speculation. I doubt anybody expects stable coins to be a better store of "dollar value" than the dollar itself. Yet, someone holds those $150B worth of stable coins. Who and why?

As someone that holds a lot of stable coins (USDC, not USDT)

The same reason you would hold dollars in a bank account.

My local currency (GBP) is weak atm and falling against the dollar. I want to be able to use crypto services (easy transfers, buying/selling crypto, borrow/lend on DeFI), but I don't want any more exposure to the currently volatile crypto markets, so I hold a lot of USDC

Some of that USDC is being lent making ~2%, better than most banks. I can transfer it to someone else ~instantly and very cheap, instead of waiting 3-5 days for a bank transfer (I recently put some money in a crypto investment fund, transferred my investment in USDC)

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

#217

Post by whimsicalism »

taspeotis wrote: post #165

Look I am very ignorant about all this stuff but ... is there any downside to shorting a stablecoin? Please be gentle with me: Like if you short it and the price doesn't move (by design) are you out any money? The price won't go up (by design) because nobody's going to spend too much money from their reserves to support a price over US$1. But it's possible for the reserves to run dry in which case the price goes down…

If you think Dai will collapse but not eth, you could "short" it by minting Dai with an eth vault, selling it immediately for USD, then buying back the Dai when it collapses and using it to unlock your eth vault.

My guess is you would want to short it without exposure to eth and then idk.. You could do the same with USDC.

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

#218

Post by whimsicalism »

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…

Nope, you are completely wrong. Wrong USDP, no discussion of how vault liquidation prevents this from happening, Dai is overcollateralized right now at 159% not 98%, USDC is not necessarily crypto correlated, Dai doesn't have $1-to-$1 redemption as it is not a centralized stablecoin, etc. etc.

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

#219

Post by LittlePeter »

eudoxus wrote: post #182
cuteboy19 wrote: post #59

Earlier quoted context omitted.

It's so decentralised that Mr. Kwon can just turn off the blockchain when he wants to!

If we're going to shit on crypto, can we at least be accurate in our statements. The validators of the Terra chain halted it. There's no switch that Kwon as an individual can flip.

How were multiple validators coordinated to switch the chain off?

When we say Putin can press the red button obviously we don't mean a physical red button pressed by Putin himself. But he is the one coordinating.

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