221–230 of 241 posts
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Something is off in USDC land though: https://news.bitcoin.com/usdc-attestations-run-late-raising-...
That site is generally not a trusted news source. I'd follow that link up with something else.
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BlockFi says they are lending at 4.5% and accepting deposits at 8.5%. What's wrong with this picture?
It makes more sense if you look at these rates: https://blockfi.com/rates/ To qualify to borrow at 4.5%, you have to have a loan to value ratio of 20%. If I understand correctly, that means you have to deposit 5x crypt than the value of the loan. On the savings side, the rates vary. If you deposit BTC, you earn 5% for the first 0.5 coins, 2% for the next 19.5 coins, and 0.5% for the rest. Since the loans are secured,…
They're effectively speculating that Tether will crash, and they get to pay you back with cheap Tethers.
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> Deflationary coins on the other hand are super insidious, they can get hoarded on a wider scale to the point of displacing productive investment in the economy. With deflationary coins it's not the volatility that's dangerous, it's the lack of it creating gridlocks in other investment markets. I worry about this too. Essentially, new money creation can go toward financing three objectives - production (manufacturin…
That's a great reply. I learned things.
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Stablecoins are an unfortunate side-effect of limited banking for the crypto industry. For the longest time, even legitimate exchanges had issues getting deposits/withdrawals working properly with normal banking system. Most traders I know use tether to move funds between exchanges for arbitrages and/or wait out a correction. Some are also using it to generate yield, but other than that, nobody is holding onto it for…
imho this observation of you just adds to every "stablecoins are a scam"-post. If there is indeed no significant outflow out of the stable-crypto system, I don't know what's stands in the way of companies to just print money out of thin air in there - which then goes to prop up bitcoin, bringing in real money from the bagholders.
Are people just forgetting the existence of Dai?
46% of DAI holdings are USDC. You might as well use USDC at that point.
2. If USDC goes to 0, then Dai has 50 cents backing, USDC has 0.
Definitely not ideal to have such high exposure to one coin though
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People, mainly in Asia, use tether where trading crypto with fiat currencies is either prohibited or very difficult, whereas it remains marginal in markets such as the United States. I.e places with exchanges that don’t have good fiat rails for various reasons. https://www.cryptovantage.com/news/why-is-tether-so-popular-... I assume these people don’t stay in tether long, they just use it like a checking account when…
If tether went away tomorrow, 60 billion of "assumed dollars" backing up crypto asset values would also vanish. Such an event would immediately tank the dollar value of all cryptocurrencies (real dollars, not USDT, that one would explode to the moon instead). And not just by 60 billion dollars of total market cap, but more like 600 billion to a trillion. There's a lot of fantasy value for each actual dollar (or USDT,…
I think it’s unlikely that this would happen to all stable coins. So what would this scenario look like if USDC or DAI still existed?
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>Having all that Tether massively increases trade volume. How? Having massive amounts of tether in your wallet doesn't increase trade volume, having users who trade increases trade volume. If I own 1B USDT and deposit it to some random exchange and let it sit there, the volume isn't going to change one bit.
Without stablecoins, people that want to cash out at a certain price will be cashing out to fiat, which generally is not a seamless process and requires stronger KYC, etc. With a stablecoin like Tether, you have people constantly "cashing out" by just trading their BTC/ETH/etc for Tether. It is much easier to go back and forth between some "hard"-dollar value (scare quotes due to the question around how "hard" Tether…
Are we talking about whales or someone holding a bitcoin or two? Trading/withdraw limits at non-USDT exchanges (eg. coinbase/kraken/gemini) are quite generous, and you'd only be running into issues if you're selling several bitcoins per day. As a concrete example, kraken has a $500k daily withdraw limit for their "Intermediate" account.
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This suggests only 5% being backed by usdc: https://daistats.com/#/collateral
The last section, "Dai from PSM-USDC-A", is also USDC in the peg stability module.
If i interpret this correctly, this could lead to a very high spike in interest for dai lenders on other collateral currencies, in case the usdc collateral goes bad.
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Why would that be the case? Can you elaborate?
Tethers own press release last month showed them as having around 5% cash and treasury bills (more or less as liquid and stable as cash). Most of the rest is unspecified "commercial paper" - if that is commercial paper from, say, Apple, no problem. If its a debt issued by unregulated, offshore, heavily leveraged crypto exchanges, it could be more or less worthless. The general consensus is that if it was the former,…
They specifically describe their loans as "secured loans (none to affiliated entities)". There's no such annotation on their "commercial paper", giving the impression that this category (which amounts to slightly under 50% of their overall holdings) may consist in large part of loans to other crypto exchanges, possibly in the form of Tether tokens.